By: DailyForex.com
The Canadian Dollar is on the backfoot during the Asian trading session, dropping to a 2-month low versus the U.S. Dollar as speculators consider the now dovish leanings of the Bank of Canada. Last Friday, inflation data from Canada showed a mild 1.2% prompting investors to speculate that the Canadian central bank will likely consider an interest rate cut later this week. The USD/CAD pair was trading at C$0.9949, the highest price since late August and well off the 5-week peak of C$1.0268 struck on Friday. As of 2:30 p.m. (JST), the pair was trading at C$0.9925.
The Japanese Yen also remains under pressure with the USD/JPY pair trading at 79.27 Japanese Yen, close to the 6-week peak of 79.47 Yen struck last week. The EUR/JPY pair was trading at 103.15 Yen, off the 5-month peak struck on Friday when the pair hit 104.15 Yen. The Bank of Japan governor said late last week that the overseas growth slowdown has been weighing heavily on business sentiment and could endanger capital spending. Analysts suggest that traders exercise caution as the Bank of Japan has been known to surprise and traders could be caught flat-footed as a result.