USD/CAD drifts higher to 1.3670 amid firmer US Dollar, hotter-than-expected US CPI data


  • USD/CAD trades on a stronger note around 1.3568 on the firmer US Dollar. 
  • The January Consumer Price Index (CPI) softened to 3.1% YoY in January from 3.4% in December, better than expected. 
  • A tight labor market in Canada might convince the BoC to push back their forecasts on rate cuts until June from April. 

The USD/CAD pair gains traction for the second consecutive day during the early Asian session on Wednesday. The uptick of the pair is bolstered by the US January Consumer Price Index (CPI) inflation data, which lifts the US Dollar (USD) and bond yields higher. USD/CAD currently trades near 1.3568, down 0.01% on the day. 

Data released from the US Bureau of Labor Statistics (BLS) on Tuesday reported that the CPI inflation softened to 3.1% YoY in January from 3.4% in December, beating the market expectation of 2.9%. Meanwhile, the Core CPI, which excludes volatile food and energy prices, climbed 3.9% in the same period, above the market consensus of 3.7%. On a monthly basis, the CPI and the Core CPI rose 0.3% and 0.4%, respectively. 

The Canadian labor market data were unexpectedly strong, with 37,000 jobs increase that more than doubled forecasts. A healthier picture of the labor market might convince the Bank of Canada (BoC) to push back their forecasts on rate cuts until June from April. 

The BoC left the policy interest rate unchanged at 5.0% at its January meeting. Governor Tiff Macklem said that the central bank has shifted from debating whether interest rates are high enough, to how long the central bank needs to keep rates at current levels. Nonetheless, the timeline for interest rate cuts has not yet been indicated. 

Market players will keep an eye on the Canadian Housing Starts and Fed’s Goolsbee and Barr speeches on Wednesday. The Retail Sales and Producer Price Index (PPI) will be due later on Thursday and Friday, respectively. These figures could give a clear direction to the USD/CAD pair. 

 

USD/CAD

Overview
Today last price 1.3565
Today Daily Change -0.0005
Today Daily Change % -0.04
Today daily open 1.357
 
Trends
Daily SMA20 1.3468
Daily SMA50 1.3418
Daily SMA100 1.3553
Daily SMA200 1.3477
 
Levels
Previous Daily High 1.3586
Previous Daily Low 1.3438
Previous Weekly High 1.3544
Previous Weekly Low 1.3413
Previous Monthly High 1.3542
Previous Monthly Low 1.3229
Daily Fibonacci 38.2% 1.3529
Daily Fibonacci 61.8% 1.3494
Daily Pivot Point S1 1.3476
Daily Pivot Point S2 1.3383
Daily Pivot Point S3 1.3328
Daily Pivot Point R1 1.3625
Daily Pivot Point R2 1.368
Daily Pivot Point R3 1.3773

 

 

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