USD/CAD consolidates its gains above 1.3650, focus on US PPI data


  • USD/CAD hovers around 1.3650 in Thursday’s Asian session. 
  • The BoC held rates at 5% for the sixth consecutive meeting on Wednesday. 
  • US inflation in March was hotter than expected, and the Fed might delay rate cuts this year. 

The USD/CAD pair consolidates its gains above 1.3650 during the Asian trading hours on Thursday. The uptick of the pair is backed by US inflation that came in stronger than expected in March, which boosted the Greenback to a yearly high of 105.30. Investors will take more cues from the US Producer Price Index (PPI), due later on Thursday. The headline and Core PPI figures are estimated to show an increase of 2.2% YoY and 2.3% YoY, respectively. 

On Thursday, the Bank of Canada (BoC) held its key interest rate at 5% for the sixth consecutive time since July at its April meeting. The BoC governor Tiff Macklem said during the press conference following the announcement that the recent progress in inflation is encouraging, but he needs to see more evidence to make sure that inflation is sustained before moving on rate cuts. Macklem further stated that an interest rate cut in June is possible.

On the other hand, high inflation in the US grew stronger than expected in March, convincing the Federal Reserve (Fed) to keep its benchmark rates higher for longer. The Labor Department’s Bureau of Labor Statistics reported on Wednesday that the US Consumer Price Index (CPI) gained 0.4% MoM in March, while the yearly CPI figure showed an increase of 3.5% YoY. Furthermore, the Core CPI, excluding volatile food and energy components, rose 0.4% MoM while climbing 3.8% from a year ago. 

Following the CPI data, the markets’ chance of a June rate cut dropped to 21%, down from 53% on Tuesday, according to the CME FedWatch tool. The US inflation report in March indicated that the path of easing inflation remains extremely bumpy, and any loosening of monetary policy is likely to be delayed. This, in turn, propels the US Dollar Index (DXY) to yearly highs and provides some support to the USD/CAD pair. 

USD/CAD

Overview
Today last price 1.368
Today Daily Change -0.0002
Today Daily Change % -0.01
Today daily open 1.3682
 
Trends
Daily SMA20 1.3562
Daily SMA50 1.3527
Daily SMA100 1.3483
Daily SMA200 1.351
 
Levels
Previous Daily High 1.3703
Previous Daily Low 1.3556
Previous Weekly High 1.3648
Previous Weekly Low 1.3478
Previous Monthly High 1.3614
Previous Monthly Low 1.342
Daily Fibonacci 38.2% 1.3647
Daily Fibonacci 61.8% 1.3612
Daily Pivot Point S1 1.3591
Daily Pivot Point S2 1.35
Daily Pivot Point S3 1.3444
Daily Pivot Point R1 1.3738
Daily Pivot Point R2 1.3794
Daily Pivot Point R3 1.3885

 

 

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