- USD/CAD struggles to defend bears during the first daily loss in three.
- Oil price initially cheered hopes of China stimulus, softer US Dollar before latest consolidation.
- Inflation is the key but holiday mood could restrict short-term moves.
USD/CAD consolidates intraday losses as it grinds higher around 1.3680, following a downbeat start to the week.
That said, softer US Dollar and optimism surrounding Crude Oil seemed to have contributed to the Loonie pair’s first daily loss in three before the latest paring of moves amid a light calendar and mixed concerns.
US Dollar Index (DXY) picks up bids from intraday low but prints 0.15% daily loss around 104.60 as traders struggle for clear directions. The reason could be linked to the hawkish Fedspeak and softer US PMIs for December.
That said, Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams recently favored higher rates. On the other hand, the US S&P Global Manufacturing PMI dropped to 46.2 from 47.7 in November, as well as the market expectation of 47.7. Further, S&P Global Services PMI declined to 44.4 in December's flash estimate from 46.2 in November and market expectation of 46.8.
It should be noted that the WTI crude oil prices, Canada’s main export retreats to $75.00 after an initial run-up to $75.93. Even so, the black gold snaps a two-day downtrend amid hopes of firmer demand from China and the US decision to buy back oil for its state reserves.
On the contrary, global recession woes underpin the US Treasury yields and challenge equity traders. In addition to the mixed signals and holiday mood could also be held responsible for the USD/CAD pair’s latest moves.
Moving on, the Bank of Canada's (BOC) Consumer Price Index (CPI) Core for November, expected 6.4% YoY versus 5.8% prior, will be important for the USD/CAD traders ahead of the Fed’s preferred version of inflation, namely Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index, expected 4.6% YoY and 5.0% prior.
Technical analysis
A seven-day-old horizontal resistance area near 1.3700 inside a rising wedge bearish formation, established since early November, restricts short-term USD/CAD moves.
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
AUD/USD tumbles to 0.6450 amid weak Australian Q3 GDP and Chinese PMI
AUD/USD is under intense selling pressure, testing 0.6450 early Wednesday. The pair bears the brunt of weaker Australian Q3 GDP data, disappointing Chinese Caixin Services PMI and US-Sino trade worries. Focus shifts to more US data and Powell's speech.
USD/JPY consolidates the uptick to near 150.10
USD/JPY is back below 150.00 in Wednesday's Asian session, struggling to extend the latest leg higher as bets for a December BoJ rate hike underpin the the Japanese Yen. However, the downside remains capped amid increased haven demand for the US Dollar on growing tariff war fears.
Gold price traders await Powell's speech for rate cut cues
Gold price extends its sideways consolidative move during the Asian session on Wednesday as traders opted to wait for Fed Chair Jerome Powell's speech. Apart from this, the US NFP report on Friday might provide cues about the interest rate outlook in the US and provide a fresh impetus to the non-yielding XAU/USD.
Paul Atkins shows reluctance to replace SEC Chair Gary Gensler
Paul Atkins, regarded as a leading candidate to succeed Gary Gensler as Chairman of the Securities & Exchange Commission, has reportedly expressed a lack of enthusiasm for the position.
The fall of Barnier’s government would be bad news for the French economy
This French political stand-off is just one more negative for the euro. With the eurozone economy facing the threat of tariffs in 2025 and the region lacking any prospect of cohesive fiscal support, the potential fall of the French government merely adds to views that the ECB will have to do the heavy lifting in 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.