Canadian dollar rose in American trade on Wednesday against a basket of major rivals, resuming gains and approaching three-month highs. 

The gains come ahead of Bank of Canada's policy decisions later today, expected to result in no changes in interest rates.

USD/CAD 

USD/CAD fell 0.3% to 1.3552, with a session-high at 1.3595, after closing down 0.4% on Tuesday on profit-taking off three-month highs at 1.3480. 

Canadian Interest Rates

Canada's interest rates have settled at 5%, already the highest since 2001 in order to control record inflation rates. 

Expectations 

We here expect the BOE to confirm the end of the current cycle of policy tightening and might even pave the way for early interest rate cuts in 2024 to prop up the economy. 

Dollar fell in European trade on Wednesday against a basket of major rivals for the first session in three days off two-week highs on profit-taking.

The losses come ahead of US private sector employment data for November, which will provide clues on the resilience and the strength of the US economy in the fourth quarter. 

The Index

The dollar index fell 0.1% to 103.89, with a session-high at 104.07, after rising 0.3% on Tuesday, the second profit in a row, marking a two-week high at 104.09 following strong US services data. 

The ISM institute reported the services PMI at 52.7 in November, beating estimates of 52.2. 

US Rates 

There's zero chance for a US interest rate hike at the December Federal Reserve meeting according to the FedWatch tool.

Odds for a 0.25% interest rate cut in March 2024 surged to 55%, while odds for such a cut in May rose to 80%.

US Data

Now markets await important data on the US labor sector this week to gauge the strength of the economy and the likely path ahead for policies.

US private sector employment is expected up 131 thousand in November, compared to a 113 thousand addition in October.

The Indian total stock market value surged past $4 trillion on Wednesday for the first time ever, a crucial milestone for the world's fifth largest securities market. 

Such a historic surge came amid increased investments by both individual investors and foreign entities, in turn closing the gap quickly with the fourth largest securities market in Hong Kong. 

In less than three years, the market value of companies listed in the Indian exchanges surged by a trillion dollar, making the Indian market the best performing of its kind in the developing world. 

Indian Stock Indices 

This year, Indian stock indices rallied 13% to a record high on track for the eighth yearly increase in a row.

Conversely, Hong Kong's main stock indices fell 17%, while total market value fell to below $4.7 trillion. 

Indian market value doubled 3 times since hitting a low in March 2020, reaching over $4 trillion.

Net purchases by foreign investors in the Indian stock market rose to over $15 billion this year, while local investment funds pumped over $20 billion.

Indian Economy Beats China 

India's stock surge comes at a time of the best economic growth rate worldwide by the Indian economy, gradually becoming a more attractive alternative to the Chinese economy for foreign investors.

While the global economy slows down due to higher interest rates and tight monetary policies, India's GDP has surged 7.6% in the third quarter, continuing to attract foreign capital away from China. 

The Indian government has also been boosting political stability and spending to lure investors in and convince them of the vitality of the Indian market. 

Thus gradually, India has moved from an economy mainly depending on consumption to one that depend additionally on investments. 

Gold prices rose in European trade on Wednesday, resuming gains after two days of losses away from recent record highs, with the dollar tapering off today.

Now investors await important US labor data and specifically on US private sector employment, which would provide more clues on the likely path ahead for US interest rates. 

Gold Prices Today

Gold prices rose 0.8% to $2,035 an ounce, with a session-low at $2,016, after falling 0.55% yesterday on profit-taking off a record high at $2,146. 

The Dollar

The dollar index fell 0.1% on Wednesday off a two-week high at 104.09 against a basket of major rivals.

A weaker dollar makes dollar-denominated gold futures cheaper to holders of other currencies.

US Rates

There's zero chance for a US interest rate hike at the December Federal Reserve meeting according to the FedWatch tool.

Odds for a 0.25% interest rate cut in March 2024 surged to 55%, while odds for such a cut in May rose to 80%. 

US Data

Now markets await important data on the US labor sector this week to gauge the strength of the economy and the likely path ahead for policies. 

US private sector employment is expected up 131 thousand in November, compared to a 113 thousand addition in October.

The SPDR

Gold holdings at the SPDR Gold Trust fell 0.29 tonnes yesterday to a total of 880.83 tonnes.