USD/CAD refreshes daily high, climbs above 1.3000 post-US Durable Goods Orders

The USD/CAD pair maintains its bid tone through the early North American session and climbs to a fresh daily high in the last hour, with bulls looking to build on the momentum beyond the 1.3000 psychological mark.

The US dollar makes a solid comeback on Wednesday and inches back closer to a two-decade high touched the previous day, which, in turn, extends support to the USD/CAD pair. Tuesday's disappointing US PMI prints and weak US home sales data had fueled speculations that the Fed may be less aggressive in its rate hiking cycle. That said, hawkish remarks by Minneapolis Fed President Neel Kashkari - the biggest dove - revive expectations for a supersized rate hike in September and push the USD higher.

The intraday USD buying remains well supported by mostly upbeat US Durable Goods Orders data. The US Census Bureau reported that headline orders remain flat MoM in July, missing expectations for a 0.6% rise. The disappointment, however, was offset by an upward revision of the previous month's reading, showing a growth of 2.2%. Adding to this, orders excluding transportation items recorded a slightly better-than-expected growth of 0.3% during the reported month, reaffirming hawkish Fed expectations.

In fact, the current market pricing indicates greater chances of a 75 bps Fed rate hike move at the September policy meeting. This remains supportive of elevated US Treasury bond yields and continues to lend support to the greenback. That said, a modest uptick in crude oil prices to a three-week high seems to underpin the commodity-linked loonie and might keep a lid on any further gains for the USD/CAD pair. Nevertheless, spot prices have managed to reverse a part of the overnight corrective decline from a six-week high.

Technical levels to watch