- USD/CAD snaps a two-day downtrend as USD attempts a bounce.
- Risk-off mood extends into Europe amid renewed China Evergrande fears.
- WTI retreats from seven-year tops, undermines CAD, supporting the pair.
USD/CAD is staging a decent comeback from four-month lows of 1.2289, heading towards 1.2350, in response to a broad-based rebound in the US dollar.
The greenback is finding its feet against its major rivals, bouncing from three-week lows, as the risk appetite takes a hit amid the re-emergence of China Evergrande default fears after the indebted property development giant failed to clinch a property sale deal with Hopson Development Holdings.
Further, global energy crunch combined with rising inflationary pressures continues to sap investors’ confidence, putting a floor under the greenback’s recent corrective decline.
On the other hand, the risk-off market profile is weighing negatively on the higher-yielding WTI, as it retreats from fresh seven-week highs of $83.71, currently down 0.70% at $82.80. The pullback in oil prices is weighing on the resource-linked loonie, aiding the recovery in the currency pair.
Despite the rebound, risks remain skewed to the downside for USD/CAD, as hotter Canadian inflation data fans sooner-than-expected rate hike bets from the Bank of Canada (BOC). The country’s annual Consumer Price Index (CPI) rose by 4.4% in September vs. 4.3% expected.
Next of relevance for the major remains the US weekly Jobless Claims data and Fedspeak while the sentiment on the Wall Street will be closely followed amid the Q3 earnings season.
USD/CAD: Technical levels to watch out
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
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.