|

USD/CAD pulls back amid US Dollar correction, lower crude Oil prices

  • USD/CAD retreats from a five-month high of 1.3846 reached on Tuesday.
  • The decline in crude Oil prices might have contributed to undermining the Canadian Dollar.
  • Fed Chair Powell highlighted that recent data indicates the timeframe for achieving the 2% inflation target will be longer than initially anticipated.

USD/CAD snaps its five-day winning streak, trading around 1.3820 during the Asian session on Wednesday. The mild correction in the US Dollar (USD) contributes to downward pressure on the USD/CAD pair. However, the weaker crude Oil prices could put pressure on the Canadian Dollar (CAD), consequently, limiting the losses of the pair.

The latest Canadian inflation figures provided support for the Bank of Canada (BoC) to consider easing borrowing conditions in its June meeting, as the closely monitored core inflation showed signs of sustained easing.

Consumer Price Index (CPI) increased by 0.6% month-over-month, slightly below the expected 0.7% in March but higher than the previous increase of 0.3%. CPI (YoY) rose by 2.9% against 2.8% prior. Meanwhile, Core CPI (YoY) rose by 2.0% at a slower pace compared to the previous 2.1% rise. The monthly Core index showed an increase of 0.5%, higher than the previous 0.1%.

On the other side, hawkish remarks from Federal Reserve (Fed) officials and the influx of safe-haven flows could bolster the US Dollar (USD) and potentially limit the downside of the USD/CAD pair. The US Dollar Index (DXY) pulls back from a five-month high of 106.51 reached on Tuesday. This decline could be attributed to a slight decline in US Treasury yields.

Federal Reserve (Fed) Chairman Jerome Powell remarked on Tuesday that the US economy has exhibited notable strength. However, Powell also noted that recent data suggests insufficient progress on inflation this year, and achieving the confidence that inflation will reach the 2% target will take "longer than expected." This hawkish stance by Powell might have lent some support to the US Dollar.

USD/CAD

Overview
Today last price1.3814
Today Daily Change-0.0015
Today Daily Change %-0.11
Today daily open1.3829
 
Trends
Daily SMA201.3607
Daily SMA501.3551
Daily SMA1001.3488
Daily SMA2001.352
 
Levels
Previous Daily High1.3846
Previous Daily Low1.3774
Previous Weekly High1.3787
Previous Weekly Low1.3547
Previous Monthly High1.3614
Previous Monthly Low1.342
Daily Fibonacci 38.2%1.3819
Daily Fibonacci 61.8%1.3802
Daily Pivot Point S11.3787
Daily Pivot Point S21.3744
Daily Pivot Point S31.3715
Daily Pivot Point R11.3859
Daily Pivot Point R21.3888
Daily Pivot Point R31.3931

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

More from Akhtar Faruqui
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD trims gains, nears 1.1700

The EUR/USD pair eases in the American afternoon and approaches the 1.1700 mark. The pair surged earlier in the day after the ECB left interest rates unchanged and upwardly revised inflation and growth figures. The US CPI rose 2.7% YoY in November, nearing Fed’s goal.

GBP/USD steadies below 1.3400 as traders digest BoE policy update and US inflation data

The GBP/USD pair stalls the previous day's pullback from the vicinity of mid-1.3400s and a nearly two-month high, though it struggles to attract meaningful buyers during the Asian session on Friday. Spot prices currently trade around the 1.3380-1.3385 region, up only 0.05% for the day, amid mixed cues.

Gold edges lower despite Fed rate cut hopes on cooling US inflation

Gold price declines to below $4,350 during the early Asian trading hours on Friday. The precious metal edges lower due to some profit-taking and weak long liquidation from shorter-term futures traders. 

Bitcoin, Ethereum, XRP face sharp volatility as US posts lowest inflation rate in years

The latest inflation report released on Thursday in the United States sparked a wave of volatility in the crypto markets. The US Consumer Price Index rose 2.7% YoY in November, below forecasts of 3.1%, and lower than September's 3.0% reading, according to the Bureau of Labour Statistics.

Bank of England cuts rates in heavily divided decision

The Bank of England has cut rates to 3.75%, but the decision was more hawkish than expected, leaving market rates higher and sterling slightly stronger. It's a close call whether the Bank cuts again in February or March.

Ripple holds $1.82 support as low retail demand weighs on the token

Ripple (XRP) is trading between a key support at $1.82 and resistance at $2.00 at the time of writing on Thursday, reflecting the lethargic sentiment in the broader cryptocurrency market.