- USD/CAD is struggling around the immediate hurdle of 1.3340 amid an absence of a potential trigger.
- The market mood has turned quiet as the United States economy is celebrating Thanksgiving Day.
- A decline in oil prices led by rising Covid-19 infections in China has impacted the Canadian Dollar.
The USD/CAD pair is displaying topsy-turvy moves just like another typical Friday session. The Lonnie asset is struggling around 1.3340 after witnessing a recovery move from below 1.3320. A bullish reversal cannot be claimed yet as it passes through various filters. No doubt, the trading activity is low on account of Thanksgiving Day but the market mood is still solid.
The USD Index (DXY) is auctioning like a dead cat amid the unavailability of any potential trigger ahead due to the light economic calendar. However, the hangover of less-hawkish commentary from Federal Open Market Committee (FOMC) minutes will continue to impact US Dollar ahead. Meanwhile, the 10-year US Treasury yields have dropped below 3.69%.
The long-term US yields are expected to remain on the tenterhooks as the Federal Reserve (Fed) is expected to shift to a lower interest rate hike for its December monetary policy meeting. Commentary from Fed policymakers as per FOMC minutes indicate that financial risks in the United States economy are accelerating led by extreme policy tightening.
Therefore, a slowdown in the rate hike pace would reduce those risks and would also present an opportunity to observe the impact of efforts made by the Fed to bring down inflationary pressures.
On the Canadian Dollar front, investors are awaiting the release of the Gross Domestic Product (GDP) for the third quarter, which will release on Tuesday. On a quarterly basis, the GDP data is expected to decline to 0.4% from the prior release of 0.8%. This might be delightful for the Bank of Canada (BOC) as a slowdown in the economy is necessary to cool down the ultra-hot inflation.
Meanwhile, oil prices have stabilized around the critical hurdle of $78.00 after a perpendicular downfall. This doesn’t present a reversal situation but an inventory distribution that could lead to further weakness. Rising infections of Covid-19 in China have resulted in a significant decline in economic projections. It is worth noting that Canada is a leading exporter of oil to the United States and a decline in oil prices is impacting 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
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.