- USD/CAD renews three-week high but stays sidelined of late.
- Traders rush to US Dollar in search of risk safety amid anxiety about US debt ceiling extension talks.
- Oil price struggles to justify surprise draw in inventories, fears of less supplies amid firmer USD.
- Risk catalysts, second-tier data may entertain Loonie traders amid cautious markets.
USD/CAD seesaws at the highest levels in three weeks, marked recently, as bulls prod the 1.3600 mark during early Thursday amid broad US Dollar strength. In doing so, the Loonie pair pays little attention to the mildly bid WTI crude oil price, Canada’s key export item.
That said, the US Dollar Index (DXY) rises to a fresh high in seven weeks, to 104.00 amid fears of the US default as the US policymaker’s inability to deliver a debt ceiling extension deal and the looming long weekend for the House Representatives, the fears of US default push global rating agencies like Fitch and Moody’s to turn cautious about the US credit rating status. Late on Wednesday, Moody’s warned about the US outlook change while Fitch put US’ AAA on Rating Watch Negative status.
Recently, the White House responded to the rating institutes’ pessimism by saying that brinkmanship over the debt limit does serious harm to businesses and American families, raises short-term borrowing costs for taxpayers, and threatens the credit rating of the US. “Tonight’s warning underscores the need for swift bipartisan action by Congress to raise or suspend the debt limit and avoid a manufactured crisis for our economy,” adds the White House.
Apart from the US default fears, mixed Fed concerns also allow the US Dollar to remain firmer. That said, the Minutes of the latest Federal Open Market Committee (FOMC) Meeting suggested that the policymakers aren’t on the same table as some suggest it is appropriate to hike the rates while others advocate for a policy pivot. Following that, Atlanta Fed President Raphael Bostic said, “‘We’re right at the beginning of the hard part’ of taming inflation.” On the same line, Federal Reserve Governor Christopher Waller mentioned that he doesn’t support stopping rate hikes unless getting clear evidence that inflation is moving down toward the 2% objective.
Elsewhere, WTI crude oil stays defensive above $74.00 even after the Energy Information Institute (EIA) reported a massive draw in the weekly inventory levels. That said, the EIA Crude Oil Stocks Change came in at -12.456M versus 0.775M market forecasts and 5.04M previous readings. Apart from the EIA inventories, a warning from Saudi Arabia also fuelled the WTI prices toward a refreshing three-week high previously. That said, Saudi Arabia's energy minister said short-sellers betting oil prices will fall should "watch out" for pain.
Against this backdrop, the S&P500 Futures snap a two-day downtrend by portraying a corrective bounce from the two-week low to 4,138 by the press time, up 0.35% intraday at the latest. On the other hand, the US 10-year and two-year Treasury bond yields remain firmer at the highest levels since mid-March, close to 3.75% and 4.40% as we write.
Looking ahead, a slew of the US data including weekly Jobless Claims, the Chicago Fed National Activity Index and Pending Home Sales will decorate the calendar and entertain USD/CAD traders. Though, major attention will be given to the US debt ceiling talks as negotiators brace for a long weekend.
A daily closing beyond an 11-week-old descending resistance line, now immediate support around 1.3560, keeps the USD/CAD buyers hopeful.
Additional important levels
|Today last price
|Today Daily Change
|Today Daily Change %
|Today daily open
|Previous Daily High
|Previous Daily Low
|Previous Weekly High
|Previous Weekly Low
|Previous Monthly High
|Previous Monthly Low
|Daily Fibonacci 38.2%
|Daily Fibonacci 61.8%
|Daily Pivot Point S1
|Daily Pivot Point S2
|Daily Pivot Point S3
|Daily Pivot Point R1
|Daily Pivot Point R2
|Daily Pivot Point R3
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.