- A modest pickup in the USD demand assisted USD/CAD to bounce off the 1.2600 neighbourhood.
- Bullish oil prices continued underpinning the loonie and might keep a lid on any strong move up.
- Investors eye the US Durable Goods Orders and speeches by FOMC members for a fresh impetus.
The USD/CAD pair managed to recover over 35 pips from near two-week lows and was last seen hovering near the top end of its daily trading range, around mid-1.2600s.
The pair extended its recent retracement slide from the vicinity of the 1.2900 mark and dropped to the 1.2600 neighbourhood during the early part of the trading action on Monday. An extension of the recent bullish run in crude oil prices to the highest level since July continued underpinning the commodity-linked loonie and exerted some pressure on the USD/CAD pair. However, a modest pickup in the US dollar demand helped limit any further losses, rather assisted the pair to attract some dip-buying at lower levels.
Worries about potential risks from the debt crisis at China Evergrande Group resurfaced after a deadline for paying $83.5 million in bond interest passed without any remarks from the company. Apart from this, prospects for an early rate hike by the Fed continued acting as a tailwind for the greenback. It is worth recalling that the Fed's so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. This helped offset a pullback in the US Treasury bond yields and revived the USD demand.
It, however, remains to be seen if the USD/CAD pair is able to capitalize on the move or meet with some fresh supply at higher levels. Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders later during the early North American session. Apart from this, the US bond yields and speeches by a slew of influential FOMC members will influence the USD. Traders might further take cues from oil price dynamics to grab some short-term opportunities around the USD/CAD pair.
Technical levels to watch
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 hovers around 1.0700 ahead of German IFO survey
EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany's IFO survey is next in focus.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold: Defending $2,318 support is critical for XAU/USD
Gold price is nursing losses while holding above $2,300 early Wednesday, stalling its two-day decline, as traders look forward to the mid-tier US economic data for fresh cues on the US Federal Reserve interest rates outlook.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.