- USD/CAD is juggling in a 20-pips range as focus shifts to Canada inflation and Fed Powell’s testimony.
- Canada’s annual inflation is seen higher at 7.5% vs. 6.8% reported earlier.
- Oil prices have plunged broadly as the market has trimmed the demand forecasts vigorously.
The USD/CAD pair is oscillating in a narrow range of 1.2995-1.3015 in the early European session. A mild correction from Friday’s high at 1.3079 is expected to turn into a fresh leg of rally as the loonie bulls are expected to remain weak on higher forecasts for the Consumer Price Index (CPI) figures.
Statistics Canada is expected to report the annual CPI figure at 7.5%, much higher than the prior print of 6.8%. While the core CPI that excludes food and energy prices will land a 5.9% vs.5.7% reported earlier. This will definitely compel the Bank of Canada (BOC) to elevate its interest rates further. It is worth noting that the BOC has already elevated its interest rates by 50 basis points (bps) in June and a similar decision is expected in July monetary policy.
On the oil front, renewed recession fears have brought extreme selling pressure on the oil prices. The black gold has slipped below $110.00 as an extreme tightening policy is trimming the growth forecasts. At the press time, the oil prices are attempting to find a cushion below $110.00. It is worth noting that Canada is the leading exporter of oil to the US. Therefore, lower oil prices result in lower fund inflows for Canada.
Meanwhile, the US dollar index (DXY) is hinting at a bearish Double Distribution Day. The asset balanced in a 104.62-104.75 in early Tokyo and tumbled firmly. Now, the asset is distributing inventory lower in the 104.37-104.46 range. The asset has turned volatile as investors are awaiting the Federal Reserve (Fed) chair Jerome Powell’s testimony, which is due on Wednesday. Fed Powell is expected to dictate the likely monetary policy action of July.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.