|

USD/CAD appreciates to near 1.3650 due to a downward correction in Oil prices

  • USD/CAD appreciates after Fed’s Neel Kashkari suggested that a rate hike might still be possible.
  • The US Dollar gained ground due to the appreciation in the US Treasury yields.
  • The decline in the WTI price put pressure on the commodity-linked Canadian Dollar.

USD/CAD edges higher for the second consecutive day, trading around 1.3650 during the Asian hours on Wednesday. The emergence of risk aversion drives investors toward the US Dollar (USD), underpinning the USD/CAD pair.

On Tuesday, the risk-on sentiment turned sour after Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, suggested that a rate hike might still be possible. Kashkari stated, “I don’t think anybody has totally taken rate increases off the table,” and expressed uncertainty about the disinflationary process, predicting only two rate cuts.

The appreciation in the US Treasury yields also supported the Greenback. The US Dollar Index (DXY), which measures the USD against six major currencies, was trading higher around 104.70, with 2-year and 10-year US Treasury yields at 4.96% and 4.54%, respectively, at the time of reporting.

Moreover, the mid-tier US Housing Price Index (MoM) for March was underperforming, with March's number coming in at 0.1% against 1.2% for February, where 0.5% was expected. On Wednesday, New York Fed President John Williams is scheduled to speak, and the Fed's Beige Book will be released, providing an overview of the current US economic situation based on interviews with key business contacts, economists, market experts, and other sources from the 12 Federal Reserve Districts.

On Loonie’s front, the downward correction in the crude Oil prices put pressure on the commodity-linked Canadian Dollar (CAD), given the fact that Canada is the largest Oil exporter to the biggest Oil consumer United States (US).

Canada’s Industrial Product Price rose by 1.5% month-over-month in April, above market forecasts of 0.6% to reach a fresh 8-month high, and up from an upwardly revised 0.9% uptick in March. The Raw Materials Price Index increased 5.5% month-over-month in April, compared to the previous rise of 4.3% and above the expected increase of 3.2%.

USD/CAD

Overview
Today last price1.3652
Today Daily Change0.0006
Today Daily Change %0.04
Today daily open1.3646
 
Trends
Daily SMA201.3668
Daily SMA501.3653
Daily SMA1001.3571
Daily SMA2001.3573
 
Levels
Previous Daily High1.3654
Previous Daily Low1.3615
Previous Weekly High1.3744
Previous Weekly Low1.3596
Previous Monthly High1.3846
Previous Monthly Low1.3478
Daily Fibonacci 38.2%1.3639
Daily Fibonacci 61.8%1.363
Daily Pivot Point S11.3623
Daily Pivot Point S21.3599
Daily Pivot Point S31.3584
Daily Pivot Point R11.3662
Daily Pivot Point R21.3677
Daily Pivot Point R31.3701

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

More from Akhtar Faruqui
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.