USD/CAD refreshes daily highs near 1.2385 amid stronger USD
- USD/CAD carries the previous session’s gains on Friday.
- The US dollar continues to rally after FOMC’s bullish projections.
- The loonie weighs down by falling crude prices.
USD/CAD continues to push higher in the early European trading hours. The pair posted gains for the third straight session. This is the lowest level for the loonie since April.
At the time of writing, the USD/CAD pair is trading at 1.2375, up 0.11% for the day.
The higher US treasury yields lift the demand for the greenback, which reads near the 92.00 mark. The sudden twist in the US Fed interest rate outlook on Wednesday kept the market on the edge.
The central bank hinted at two rate hikes by the end of 2023. The higher interest rate negatively affects the bond prices, and hence, higher treasury yields.
The upbeat economic outlook bolstered by the ultra accommodative monetary policy and the government stimulus keeps investors invested in the greenback.
On the other hand, the Canadian central bank was the first among advanced economies to talk about the slowing pace of government bond purchases.
Meanwhile, the Bank of Canada official previously said that the Canadian economy is recovering as expected over a strong rebound in summer’s demand and well planned vaccine rollout.
The falling commodity prices affect the loonie negatively as the economy depends largely on the export of oil & gas.
On the economic docket, traders await for Canada's New Housing Price Index to take fresh trading impetus.
USD/CAD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
