USD/CAD hovers below 1.3350 after a nosedive move inspired by weak US Inflation outlook

USD/CAD is oscillating near 1.3340 after an intense sell-off inspired by lower US consumer inflation expectations.
The USD Index printed a fresh 11-month low at 100.42 as significantly decelerated US PPI joined already softened US CPI.
US labor market conditions eased further as weekly Initial Jobless Claims jumped to 239K from the estimates of 232K.

Sagar Dua FXStreet

The USD/CAD pair has turned quiet around 1.3340 after a nosedive move on Thursday as the aggressively softened United States Producer Price Index (PPI) confirmed that US consumer inflation expectations are set for a sheer decline. The Loonie asset has registered a four-day losing streak and the absence of signs of recovery is supporting more downside ahead.

S&P500 futures were heavily bought by the market participants as fears of further rate hikes beyond May receded as inflation has decelerated, indicating a cheerful market mood. However, Morgan Stanley US chief equity strategist Mike Wilson has a contrary view on S&P500. He expects the base-case scenario for the S&P500 to end the year is 3,900. The analyst at Morgan Stanley supported his view citing that, the earnings situation is way worse than what the consensus thinks and the banking stress only makes us even more confident of that.

The US Dollar Index (DXY) printed a fresh 11-month low at 100.42 as significantly decelerated US PPI joined the already softened US Consumer Price Index (CPI) and trimmed fears of persistent inflation. Annual headline US PPI decelerated to 2.7% vs. the estimate of 3.0%. And core PPI remained in line with expectations at 3.4%. The reason behind the severe decline in US PPI is the lower gasoline prices recorded in March. Producers passed on the benefit of lower input costs to ultimate consumers by reducing the prices of goods and services at factory gates.

Apart from that, US labor market conditions eased further as weekly Initial Jobless Claims jumped to 239K from the estimates of 232K and the former release of 228K. This has also receded fears of stubborn US inflation.

On the oil front, oil prices dropped below $83.00 after OPEC kept a stable oil demand outlook. The oil cartel left the global oil demand growth forecast for 2023 unchanged at 2.32 million barrels per day, as reported by Reuters.

It is worth noting that Canada is the leading exporter of oil to the United States and lower oil prices would impact the Canadian Dollar.

USD/CAD

Overview
Today last price	1.3342
Today Daily Change	-0.0100
Today Daily Change %	-0.74
Today daily open	1.3442

Trends
Daily SMA20	1.3582
Daily SMA50	1.3563
Daily SMA100	1.3531
Daily SMA200	1.3397

Levels
Previous Daily High	1.3489
Previous Daily Low	1.3428
Previous Weekly High	1.3537
Previous Weekly Low	1.3406
Previous Monthly High	1.3862
Previous Monthly Low	1.3508
Daily Fibonacci 38.2%	1.3451
Daily Fibonacci 61.8%	1.3466
Daily Pivot Point S1	1.3417
Daily Pivot Point S2	1.3392
Daily Pivot Point S3	1.3355
Daily Pivot Point R1	1.3478
Daily Pivot Point R2	1.3514
Daily Pivot Point R3	1.3539

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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