USD/CAD fluctuates around 1.3730s, below the YTD high above 1.3800, as sentiment turns sour
|- USD/CAD edges up but remains below the YTD highs at around 1.3730s, forming a doji.
- US economic data was positive, supportive of the Fed’s current policy stance.
- The US CB Consumer Confidence improved, supported by declining energy prices.
The USD/CAD edges higher during the North American session, but slightly below the YTD high at 1.3808, due to a risk-on impulse, which put a lid on the greenback’s rise. However, late in the day, as shown by the US Dollar Index, it recovered some ground back above the 114.00 thresholds, underpinned by further Fed hawkish commentary.
At the time of writing, the USD/CAD is trading at 1.3734, up 0.02%, after bottoming at around 1.3639 earlier in the session.
US economic data revealed during the day was better-than-expected, justifying the need for further rate increases. The US Department of Commerce reported that Durable Good Orders for August fell 0.2% but were better than the 0.3% contraction estimated. At the same time, the US Census Bureau revealed that New Home Sales for the same period jumped by 0.685M, exceeding forecasts of 0.5M.
Of late, the CB Consumer Confidence improved in September for the second consecutive month, up at 108 vs. forecasts of 104.6. Lyn Franco, Senior Director of Economic Indicators at the Conference Board, said, “Consumer confidence improved in September for the second consecutive month, supported in particular by jobs, wages, and declining gas prices.”
Elsewhere, other Fed policymakers crossing newswires, led by Chicago’s Fed Evans, said that rates need to get to the 4.50/4.75% range, higher than he initially thought. Evans added that a “recession-like” scenario is not seen and echoed his colleague, Susan Collins, saying that the job market should ease to curb inflationary pressures.
Later, the St. Louis Fed James Bullard said that the US has “a serious problem of inflation,” while adding that he expects rates to finish in 2022 at around 4.5%, which would slow down the economy and curb inflation down.
The lack of reported Canadian economic data left traders adrift to the US dollar dynamics and market sentiment. On Wednesday, the US economic docket will feature Pending Home Sales, and further Fed policymakers will be speaking, with Bostic, Bullard, Bowman Barking, and Evans, crossing newswires.
USD/CAD Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.