USD/CAD pair rises slightly ahead of Fed rate decision

Key Movers

The US Dollar Index (DXY) remained mostly flat amid strong data from the US this morning. The January US Consumer Confidence Index was released this morning at 114.8, which was up from 108 in December. This is the highest reading since December 2021, implying that the average consumer’s confidence in the US market is improving significantly. The job openings and labor turnover survey (JOLTS) for December was released at 9.026 million versus the expected 8.75 million. This is the highest level in 3 months, which suggests that the labor market maintained strength. All eyes will look to the Federal Reserve’s rate decision tomorrow when the market is expecting a hold on interest rates.

The Eurozone economy reported 0% quarter-over-quarter Gross Domestic Product (GDP) growth, and 0.1% growth year-over-year, narrowly avoiding a recession. In contrast to the US consumer confidence data, the Eurozone consumer confidence index for January came in below its previous month reading at 96.2 versus last month’s 96.4. This showed the Eurozone economy continues to struggle for strong footing. The USD/EUR remained mostly flat this morning.

Mexico reported a 0.1% quarter-over-quarter GDP growth, compared to an anticipated of 0.3% growth. This showed a lagging Mexican economy as the USD/MXN pair held flat today.