- USD/CAD faces stiff resistance in surpassing the 1.3380 hurdle as the focus shifts to BoC policy.
- BoC Governor is expected to increase interest rates by 25 bps to 4.5%.
- A sell-off in S&P500 futures is portraying caution in the market mood.
The USD/CAD pair is facing barricades in paddling above the immediate resistance of 1.3380 in the Asian session. The Loonie asset is expected to display a volatility contraction as investors are awaiting the interest rate decision by the Bank of Canada (BoC) for fresh cues. BoC Governor Tiff Macklem might continue hiking interest rates further to tame the roaring inflation.
Meanwhile, S&P500 futures are facing immense sell-off, portraying investors getting risk-averse ahead of the release of the United States Gross Domestic Product (GDP) data. The 500-US stock basket futures have dropped sharply amid a decline in investors’ risk appetite. The US Dollar Index (DXY) is building a cushion around 101.50. The 10-year US Treasury yields have dropped below 3.46%.
According to a poll from Reuters, BoC Governor Tiff Macklem’s aggressive policy-tightening campaign is expected to calm as the street sees a further interest rate hike by 25 basis points (bps) to 4.50%. Also, it states that the Canadian central bank will keep interest rates at 4.5% for the rest of the year, which indicates that this might be the end of further policy tightening. Canada’s headline inflation stood at 6.3% for December and is expected to remain above the 2% inflation target till Q3CY2024.
Oil prices have attempted a recovery after dropping to near $80.00 as US President Joe Biden is considering refilling the Strategic Petroleum Reserve (SPR), which was eased to combat mounting oil prices. This might disturb the equilibrium in the demand-supply mechanism, resulting in short-term pain for oil buyers due to higher prices. It is worth noting that Canada is a leading oil exporter to the United States, and a recovery in oil prices will support the Canadian Dollar.
On the United States front, the release of the GDP data might trigger volatility ahead. According to the consensus, the annualized GDP is seen lower at 2.8% vs. the prior release of 3.2%.
|Today last price||1.3369|
|Today Daily Change||-0.0003|
|Today Daily Change %||-0.02|
|Today daily open||1.3372|
|Previous Daily High||1.3414|
|Previous Daily Low||1.3347|
|Previous Weekly High||1.3521|
|Previous Weekly Low||1.3351|
|Previous Monthly High||1.3705|
|Previous Monthly Low||1.3385|
|Daily Fibonacci 38.2%||1.3372|
|Daily Fibonacci 61.8%||1.3388|
|Daily Pivot Point S1||1.3341|
|Daily Pivot Point S2||1.3311|
|Daily Pivot Point S3||1.3275|
|Daily Pivot Point R1||1.3408|
|Daily Pivot Point R2||1.3444|
|Daily Pivot Point R3||1.3475|
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.