USD/CAD soars and climbs above 1.2150 for the first time since mid-May
|- US dollar soars across the board, as stock turn lower and yield rise.
- USD/CAD about to post the best weekly gain in months.
- Next week: Canadian CPI and Federal Reserve meeting.
The USD/CAD pair kept rising during the American session and jumped to 1.2163, reaching the strongest level since mid-May. Near the end of the week, it remains near the highs, with a solid bullish momentum.
The pair strengthened amid a rally of the US dollar and also boosted by technical factors after breaking above 1.2120. Higher crude oil prices (WTI up 0.65%) are not helping the loonie.
The DXY gains 0.55% as it trades at 90.55, about to test the June high, after making a rally from 90.00. Regarding yields, the US 10-year rose from 1.42% to 1.47%; it still is significantly below the level it had prior to the US inflation numbers released on Thursday.
Key data for next week
The USD/CAD is about to post the biggest weekly gain since February ahead of an important week that includes the Federal Reserve meeting. On Wednesday the Fed will announce its decision. Market participants expect no change in rates and will look for what the central bank says about the surge in inflation.
In Canada, economic reports due include Housing Starts in May, Manufacturing and Wholesale Sales for April and the most important, May’s CPI. “We expect next week’s inflation report to show the headline rate held firm at 3.4% in May—matching April’s rise. This would mark the strongest back-to-back increases in a decade, although the jump is off of an exceptionally low base set a year ago, when activity ground to a halt during the initial COVID wave,” says analysts at RBC Economics.
Technical levels
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