- USD/CAD picks up bids to defend the previous day’s rebound from one-week low.
- WTI crude oil remains pressured around monthly low amid chatters over gas tax holiday.
- Bulls stay hopeful amid market’s anxiety, Fed Chair Powell’s defense to the biggest rate hike since 1994.
USD/CAD refreshes intraday high around 1.2960 during the initial Asian session on Thursday, extending the rebound from the weekly low. In doing so, the Loonie pair takes clues from softer oil prices, as well as the US dollar’s reluctance to decline further, amid a quiet session.
WTI crude oil prices dropped 0.85% to $103.50, down for the second consecutive day around the lowest levels in six weeks. The black gold’s latest weakness could be linked to the bearish weekly inventory data from the American Petroleum Institute (API). As per the API Weekly Crude Oil Stock for the period ended on Jun 17, stockpiles rose 5.607 million barrels versus an increase of 0.736 million barrels the previous week. Additionally, talks that US President Joe Biden will announce gas tax relief by the end of the week also weighed on the oil prices.
It should be noted that the market’s indecision following the Fed Chair Jerome Powell’s Testimony and the fears of recession, as well as aggressive monetary policy actions, also propel the USD/CAD prices.
Federal Reserve (Fed) Chairman Jerome Powell’s justification for the recent rate hike, the biggest since 1994, managed to gain acceptance, at least during the first round of the Testimony on the bi-annual Monetary Policy Report. However, Powell’s rejection of the need for a heavy rate increase seemed to exert downside pressure on the greenback afterward.
While portraying the mood, Wall Street managed to pare the day-start losses but ended Wednesday with mild losses whereas the US 10-year Treasury yields marked the biggest daily fall in a week by ending the day at around 3.16%. That said, the S&P 500 Futures print mild losses by the press time.
Talking about data, Canada’s headline Consumer Price Index (CPI) rose to 7.7% YoY versus 7.4% expected and 6.8% prior. The more observed inflation figure, namely the Bank of Canada CPI Core, rose 6.1% YoY compared to 5.9% market consensus and 5.7% previous readings.
Moving on, the US S&P Global PMIs for June will entertain the USD/CAD traders along with the weekly US Jobless Claims and the second round of Fed Chair Jerome Powell’s Testimony.
Technical analysis
10-DMA puts a floor under short-term USD/CAD declines around 1.2930. However, the double tops around 1.3075-80 appear a tough nut to crack for the bulls.
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 holds near 155.50 after Tokyo CPI inflation eases more than expected
USD/JPY is trading tightly just below the 156.00 handle, hugging multi-year highs as the Yen continues to deflate. The pair is trading into 30-plus year highs, and bullish momentum is targeting all-time record bids beyond 160.00, a price level the pair hasn’t reached since 1990.
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Ethereum could remain inside key range as Consensys sues SEC over ETH security status
Ethereum appears to have returned to its consolidating move on Thursday, canceling rally expectations. This comes after Consensys filed a lawsuit against the US SEC and insider sources informing Reuters of the unlikelihood of a spot ETH ETF approval in May.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.