By FXEmpire.com
The USD/CAD pair erased earlier gains and dropped back on Tuesday, where the USD/CAD pair rose earlier on Tuesday to reach parity amid the huge pessimism that continued to dominate markets after the S&P downgrade the U.S. AAA credit rating, however, better than expected housing data from Canada, in addition to hopes the FOMC will pledge to keep the loose monetary policy unchanged for an extended period, provided the CAD with momentum to rise back against the USD, and accordingly, the USD/CAD pair fell back.
Moreover, crude oil prices erased earlier losses and rose back after falling to as low as $75 a barrel amid the uncertainty surrounding the outlook for global growth, however, crude oil prices rebounded to the upside, which boosted the CAD, and pushed the USD/CAD pair to drop.
Investors will be focused on the FOMC rate decision later on Tuesday amid the recent developments, where it’s unclear whether the FOMC will signal the possibility of QE3 after the S&P downgrade to the U.S. debt.
Wednesday August 10:
From the U.S. the wholesale inventories index for June is due at 14:00 GMT and expected to ease to 1.0% following 1.8%.
At 18:00 GMT the Monthly Budget Statement for July is due with the deficit expected to widen to $140.0 billion from $43.1 billion.
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