- USD/CAD builds on Wednesday's strong gains, breaks above 1.2300.
- Broad-based USD strength remains intact ahead of mid-tier data on Thursday.
- WTI clings to modest daily gains around $72.00.
After rising sharply during the American trading hours and closing in the positive territory on Wednesday, the USD/CAD pair preserved its bullish momentum and climbed to its highest level since early May at 1.2346 on Thursday. As of writing, the pair was up 0.5% on a daily basis at 1.2335.
DXY continues to push higher toward 92.00
The unabated USD strength remains the primary market theme following the hawkish shift seen in the FOMC's policy outlook. In its updates Summary of Economic Projections, the so-called dot plot, the Fed revealed that the number of policymakers who expect a lift-off in policy rate from zero in 2023 rose to 13 from seven in March.
During the press conference, FOMC Chairman Jerome Powell adopted a more cautious tone with regards to the inflation outlook and said that they are not dismissing the possibility that inflation will stay high for longer than they forecast.
The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, gained nearly 1% on a daily basis and extended its rally on Thursday. Currently, the DXY is at its highest level in two months at 91.78, rising 0.43% on the day.
Later in the session, the ADP Employment Change for May will be featured in the Canadian economic docket. The weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Index from the US will be looked upon for fresh impetus as well.
Meanwhile, the barrel of West Texas Intermediate is posting small daily gains around $72, possibly helping the commodity-related loonie limit its losses for the time being.
Technical levels to watch for
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
EUR/USD extends losses on dovish remarks from ECB members, trades near 1.0780
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD trades sideways above 1.2600 amid quiet session
The GBP/USD pair trades sideways around 1.2622 during the early Friday. The market is likely to be mute in light trading on Good Friday. Later in the day, the US Core Personal Consumption Expenditures Price Index will be released.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.