USD/CAD: Canadian dollar soared on higher oil and higher US bond yields
- CAD soared on broader USD weakness, higher bond yields.
- CAD is also being helped by rebound in oil today.
USD/CAD is now trading around 1.25200 in New York session, tumbling by almost 0.60% and near a day low on broad weakness in greenback as US10Y bond yield has soared above 2.90% after upbeat US CPI today.
Although US stock market (SPX-500) is still resilient and surged by over 1% to 2688 from earlier post-CPI panic low of 2627 on VIX option (derivatives) expiry & regulatory probe factor, market may be concerned that higher US bond yields will be ultimately bad for overall economy and equities.
CAD is also being supported by higher oil pricestoday, being a commodity-related currency. Also, BOC (Bank of Canada) may be the most hawkish central bank after Fed in G-10 universe and coupled with that overall solid Canadian economic data has made the CAD stronger today, despite concern of a NAFTA derailment.
Technical view:
Price action suggests that USDCAD has to sustain above 1.2711 for any further rally, otherwise sustaining below 1.2688, it will again fall to 1.25310-1.22490 area in the coming days.
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