USD/CAD rebounds after hitting five-year lows, rises toward 1.2100
- US dollar gains momentum as US yields soar and Wall Street drops.
- Canadian dollar among top performers of the American session.
The USD/CAD tumbled earlier on Wednesday to 1.2045, reaching the lowest intraday level since 2015. Then it rebounded, rising toward 1.2100, erasing daily losses. Higher US yields boosted the dollar across the board. The 10-year climbed to 1.68%, reaching the highest level in months.
The trigger of the decline in Treasuries was US April’s inflation numbers that came in above expectations and the annual CPI at the highest level in more than ten years. “Investors and central bankers are watching to see if firming underlying inflation pressure associated with a robust recovery in consumer demand outside of base effects will continue. The April report showed early signs of that, and saw market-based measures of inflation expectations tick up”, explained analysts at RBC.
The loonie pulled back versus the dollar over the last hours; however, it rose versus most of its rivals. Monetary policy divergence between the Bank of Canada and other central banks, plus higher crude oil prices, offers support to the currency.
Versus the euro, the loonie trades at one-year highs; AUD/CAD dropped under 0.9400 for the first time since November, and NZD/CAD stands at the weakest since October.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
