- USD/CAD edges lower on Monday and is weighed down by a combination of factors.
- An uptick in Oil prices underpins the Loonie and exerts pressure amid a softer USD.
- Rallying US bond yields acts as a tailwind for the buck and should any further losses.
The USD/CAD pair comes under some selling pressure following a brief intraday consolidation on Monday and drops to a fresh daily low, around the 1.3700 mark heading into the North American session. The intraday downtick drags spot prices away from the 1.3800 round figure, or over a one-week high touched on Friday and is sponsored by a combination of factors.
Crude Oil prices edge higher on the first day of a new week amid expectations that a demand recovery in China and lower Russian production will tighten global supply. This, in turn, underpins the commodity-linked Loonie, which, along with subdued US Dollar (USD) demand, exerts some downward pressure on the USD/CAD pair. The risk-on impulse - as depicted by a positive tone around the equity markets - is seen as a key factor acting as a headwind for the safe-haven buck
Investors breathe a sigh of relief in reaction to the news that First Citizens Bank & Trust Company will buy all of Silicon Valley Bank's deposits and loans from the Federal Deposit Insurance Corporation (FDIC). Moreover, reports that US authorities were in the early stage of deliberation about expanding emergency lending facilities further boosted investors' confidence. Apart from this, the Federal Reserve's signal last week that it might soon pause the rate-hiking cycle weighed on the Greenback.
It is worth recalling that the US central bank raised interest rates by 25 bps on Wednesday, as was widely anticipated, though sounded cautious on outlook. That said, a strong follow-through rally in the US Treasury bond yields, bolstered by easing fears of a full-blown banking crisis, helps limit the downside for the USD and should lend some support to the USD/CAD pair. This, in turn, warrants some caution for aggressive bearish traders and before positioning for further intraday losses.
There isn't any major market-moving economic data due for release on Monday, either from the US or Canada. That said, the US bond yields and the broader risk sentiment might still influence the USD. Apart from this, traders will take cues from Oil price dynamics to grab short-term opportunities around the USD/CAD pair. The focus, meanwhile, remains on this week's important US macro data - the Conference Board's Consumer Confidence Index on Tuesday, followed by the final GDP print on Wednesday and the Fed's preferred inflation gauge - the US Core PCE Price Index on Friday.
Technical levels to watch
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 steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.