- USD/CAD had extended its recovery above 1.3440 amid strength in the US Dollar.
- The overall market mood is cautious despite the improving United States-China trade relationship.
- A continuation of a steady interest rate policy is anticipated by the BoC.
The USD/CAD pair has stretched its recovery to near 1.3440 in the early New York session. The Loonie asset rebounded firmly from near the round-level support of 1.3400 amid strength in the US Dollar Index (DXY). The USD Index has sensed marginal selling pressure after printing a fresh day high to near 104.40.
S&P500 is expected to open on a flat note considering cues from overnight performance. A volatile action is widely anticipated amid voting for a US debt-ceiling raise in Congress. The overall market mood is cautious despite the improving United States-China trade relationship. Reuters reported on Tuesday, China's Vice Foreign Minister and a senior US State Department official had a frank, constructive, and fruitful communication on promoting Sino-US relations and properly managing differences.
A solid recovery from the USD Index has supported the US Treasury yields. The yields offered on 10-year US government bonds have climbed above 3.7%.
Going forward, the interest rate decision by the Bank of Canada (BoC) will remain in focus. BoC Governor Tiff Macklem is expected to keep interest rates steady at 4.5% as Canada’s inflationary pressures are steadily decelerating. Canada’s inflation has already slowed to 4.4% from its recent high of 8.1%. Therefore, the BoC has the luxury of keeping interest rates steady.
On the oil front, oil prices have found intermediate support near $70.00 after a vertical sell-off. More downside in the oil price seems solid as global central banks are preparing for a fresh interest rate hike cycle. It is worth noting that Canada is the leading exporter of oil to the United States and a rebound in the oil price might support the Canadian Dollar.
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
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.