USD/CAD consolidates below 1.3600 as investors look for fresh Fed interest rate cues

• USD/CAD consolidates below 1.3600 ahead of Fed Harker’s speech.
• The Fed is expected to cut interest rates further by 75 bps this year.
• The BoC may likely continue easing interest rates further.

The USD/CAD pair trades sideways below the crucial resistance of 1.3600 in Friday’s North American session. The Loonie asset consolidates as investors look for fresh cues about Federal Reserve’s (Fed) likely monetary policy action in the remaining policy meetings this year.

The market sentiment turns slightly cautious on a light United States (US) economic calendar day. The S&P 500 has opened on a weak note, exhibiting uncertainty over investors’ risk appetite. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, attempts to gain ground above the annual low of 100.20.

Investors expect that the Fed will cut interest rates further by a total of 75 basis points (bps) in the November and December meetings, suggesting that there will be atleast one 50 bps interest rate cut decision. However, the central bank projected the federal fund rate at 4.4% by year-end. Also, Fed Chair Jerome Powell cleared in his press conference that the 50 bps will not new normal.

For fresh interest rate guidance, investors will focus on Philadelphia Fed Bank President Patrick Harker’s speech at 18:00 GMT for fresh guidance on interest rates.

On the Loonie front, growing speculation for more interest rate cuts by the Bank of Canada (BoC) will keep the Canadian Dollar (CAD) under pressure. Market expectations for BoC rate cuts rose after Canada’s headline inflation decelerated to 2% in August.