• USD/CAD climbs above 1.3588, fueled by BoC Governor Macklem's dovish comments and falling oil prices from Tropical Storm Francine.
• BoC hints at more aggressive rate cuts as Canadian economy slows and unemployment hits a seven-year peak.
• Investors anticipate US CPI data, which could bolster expectations for a Fed rate cut at the upcoming September 17-18 meeting.

The USD/CAD rallied to a three-week high above the 200-day moving average (DMA) of 1.3588, gaining 0.36% after bouncing off the daily lows of 1.3553. The rally was weighed by the dovish comments of Bank of Canada (BoC) Governor Tiff Macklem and the drop in oil prices. At the time of writing, the pair trades at 1.3608.

USD/CAD climbs and surpasses 200-DMA, on BoC comments

Wall Street ended Tuesday’s session with gains, while the US Dollar clings to minimal gains of 0.06%, according to the US Dollar Index (DXY), trading at 101.67.

BoC’s Governor Macklem stated that deeper rate cuts could be appropriate and added that shifts in global trade may drive up prices.

In the meantime, the impact of tropical storm Francine sponsored a leg-down in oil prices as oil and gas producers shut off most installations as the storm advanced toward landfall in Louisiana.

The Canadian Dollar weakened since the Bank of Canada (BoC) was the first major central bank to slash rates amid fears of an economic slowdown. Last week, Canada’s unemployment rate climbed to 6.6%, the highest in seven years, excluding the two years of the COVID-19 pandemic.