- USD/CAD gained positive traction on Thursday and built on the overnight bounce a multi-week low.
- Retreating oil prices undermined the loonie and provided a modest lift amid a modest USD strength.
- Hawkish Fed expectations, rising US bond yields, cautious market mood all benefitted the greenback.
The USD/CAD pair continued scaling higher through the first half of the European session and climbed to a two-day high, around the 1.2685 region in the last hour.
A combination of factors assisted the USD/CAD pair to build on the previous day's post-BoC recovery move from the 1.2600 neighbourhood and gain some positive traction on Thursday. The Bank of Canada held interest rate at 0.25% and stuck to its guidance that a first hike could come in the middle quarters of 2022. The BoC, however, warned that the Omicron coronavirus variant has created renewed uncertainty, which seemed to be the only factor that weighed on the Canadian dollar.
Meanwhile, crude oil prices struggled to find acceptance above the $73.00/barrel mark and witnessed a modest pullback from a two-week high touched earlier this Thursday. This further undermined the commodity-linked loonie and provided a goodish lift to the USD/CAD pair amid a modest pickup in the US dollar demand. A further rise in the US Treasury bond yields, bolstered by hawkish Fed expectations, along with the cautious market mood extended some support to the safe-haven greenback.
Investors seem convinced that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation and have been pricing in the possibility for liftoff in May 2022. This was seen as a key factor that pushed the yield on the benchmark 10-year US government bond back above the 1.50% threshold. Adding to this, escalating geopolitical tensions overshadowed the recent optimism in the markets and acted as a tailwind for safe-haven currencies, including the USD.
Market participants now look forward to the US economic docket, featuring the release of the usual Weekly Initial Jobless Claims. Traders will further take cues from the US bond yields and the broader market risk sentiment, which will drive the USD demand. Apart from this, oil price dynamics should provide some impetus to the USD/CAD pair. The key focus, however, will remain on Friday's release of the US consumer inflation figures, which will help determine the next leg of a directional move.
Technical levels to watch
|Today last price||1.2678|
|Today Daily Change||0.0028|
|Today Daily Change %||0.22|
|Today daily open||1.265|
|Previous Daily High||1.2666|
|Previous Daily Low||1.2608|
|Previous Weekly High||1.2846|
|Previous Weekly Low||1.2713|
|Previous Monthly High||1.2837|
|Previous Monthly Low||1.2352|
|Daily Fibonacci 38.2%||1.2644|
|Daily Fibonacci 61.8%||1.263|
|Daily Pivot Point S1||1.2617|
|Daily Pivot Point S2||1.2582|
|Daily Pivot Point S3||1.2558|
|Daily Pivot Point R1||1.2676|
|Daily Pivot Point R2||1.2701|
|Daily Pivot Point R3||1.2735|
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.
Follow us on Telegram
Stay updated of all the news
AUD/USD recovers to 0.6700 amid upbeat mood
AUD/USD is battling 0.6700, recovering losses induced by softer Australian monthly inflation data. The US Dollar is struggling to extend the rebound amid a better market mood, as the global banking jitters ease. Focus on US data, Fedspeak.
USD/JPY approaches 132.00 amid BoJ-speak, firmer yields
USD/JPY is holding higher ground, approaching the 132.00 level early Wednesday. The pair is capitalizing on the risk-on mood and higher US Treasury bond yields amid mixed comments from the BoJ policymakers. US housing data next on tap.
Gold to extend choppy trading, awaiting a fresh catalyst Premium
Gold price has paused the previous rebound early Wednesday, as the United States Dollar (USD) seems to have found its feet following a rough start to the week. However, the underlying strength in the US Treasury bond yields so far this week could limit the Gold price advance.
This is how Arbitrum and Optimism are dragging users away from Ethereum
Arbitrum became the highlight of the month as the Layer-2 (L2) blockchain launched its native token, ARB. Since then, the L2 narrative that was once the talking point of 2022 has exploded again.
Unfazed: Confidence edges higher despite banking situation
Consumers may not love the present conditions, but a slightly more upbeat take on where things are headed was enough to give overall confidence a nudge in the right direction in March.