USD/CAD consolidates near 1.3600 ahead of FOMC minutes and US PPI data

• USD/CAD turns choppy around 1.3600 as investors await US data.
• Fed policymakers believe that higher bond yields could diminish the need for more interest rates.
• Russia’s Novak warned that the deepening war situation in Gaza could affect the oil market.

The USD/CAD pair trades back and forth near the round-level resistance of 1.3600 in the European session. The Loonie asset struggles to find a direction as investors await the Federal Open Market Committee (FOMC) minutes and the producer inflation data for September.

S&P500 futures added some gains in the London session, portraying an upbeat market mood. US equities were heavily bought on Tuesday as Federal Reserve (Fed) policymakers cautioned about rising Treasury yields and delivered neutral guidance on interest rates. Fed policymakers believe that higher bond yields could diminish the need for more interest rates.

The US Dollar Index (DXY) discovers an intermediate support near 105.60 after a five-day losing spell as the focus shifts to the Producer Price Index (PPI) and the FOMC minutes. As per the consensus, US producers raised prices of core goods and services at factory gates at a steady pace of 0.2%. The headline PPI grew at a slower pace of 0.4% against 0.7% growth in August.

On an annualized basis, headline PPI is foreseen steady at 1.6%. The core PPI accelerated marginally to 2.3% against the former reading of 2.2%.

Meanwhile, oil price trades inside Monday’s range as investors await further development in the Israel-Hamas conflict. Russian Deputy Prime Minister Alexander Novak said on Wednesday that “Russia and Saudi Arabia will discuss oil market situation and oil prices,” TASS news agency. Novak warned that the deepening war situation in Gaza could affect the oil market.

It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.