USD/CAD almost flat on broad US dollar recovery and surge in oil
- CAD under pressure on muted Canadian economic data & dovish stance by BOC last week.
- CAD is tbeing helped today by higher oil.
USD/CAD has closed the European session around 1.2563, up by almost 0.05% on a broad recovery in the US dollar and a surge in oil to two weeks high, positive for commodity currencies like the CAD. The overall trading range was extremely narrow on Monday, as both markets, the US and Canada were shut on the day for a public holiday.
The USD was boosted on Friday by short covering, recovering from a15 months low after Japanese government said that it is watching Yen´s move with “greater” sense of concern and is ready to act when actually needed. Also, overall US economic data was upbeat on the weekend.
On the other side, on Friday, the CAD was under stress on muted Canadian economic data coupled with some dovish talks from BOC.
BOC (Bank of Canada) sounds somewhat dovish last week. BOC’s Schembri commented that he BOC may take a cautious approach to interest rate hikes amid subdued Canadian economic activity, high household debt levels, muted wage growth, and tepid inflationary pressure.
On Monday, the CAD got a boost on higher oil amid OPEC´s jawboning and renewed geopolitical tensions in the Middle East and thus closed almost flat against the USD, despite greenback rallied against other non-commodity currencies.
Technically for USD/CAD, the area of 1.2447 is now a vital support and it needs to sustain above 1.2590 for an advance to the 1.2710 zone in the coming days; sustaining below 1.2447, the area of 1.2249 may be visible in the near term.
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