USD/CAD stabilizes above 1.3150 as US ISM hogs limelight, Oil below $90.00
|- USD/CAD is juggling above 1.3150 as DXY has strengthened despite lower consensus for US ISM PMI.
- A decline in US ADP Employment Change was already expected as US techs went ahead with lay-off plans.
- Oil prices have slipped below $90.00 amid soaring recession fears.
The USD/CAD pair is attempting an establishment above 1.3150 as the US dollar index (DXY) has climbed above 109.00 in the Asian session. The asset has displayed a bullish open test-drive move and is expected to show more gains. At the press time, the major recorded an intraday high of 1.3167.
The DXY defended the downside momentum on Wednesday despite a downward shift in US Automatic Data Processing (ADP) Employment Change. An unconventional methodology adopted by the ADP agency displayed job additions in the private sector by 132k, lower than the prior release of 288k. As big tech boys have preferred retrenchment to offset a decline in growth forecasts, the employment generation process was expected to go through severe pain.
Going forward, investors’ entire focus will remain on US ISM Manufacturing PMI data, which is seen lower at 52.0 than July’s print of 52.8. As the Federal Reserve (Fed) is hiking interest rates at a decent pace, cheaper funds are disappearing from the economy. This has forced the corporate to drop expansion plans and to put more filters on investment opportunities.
Meanwhile, oil prices have slipped below the psychological support of $90.00 as recession fears are accelerating sharply. Western central banks are good to announce a fresh leg of interest rate hikes to tame the inflationary pressures. Therefore, the overall demand is expected to face the wrath and eventually oil demand will remain vulnerable.
On the loonie front, the Canadian economy has grown by 3.3% on an annual basis, higher than the prior release of 3.1%. However, the Gross Domestic Product (GDP) data remained significantly lower than the consensus of 4.4%.
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