The USD/CAD pair attracts some buying for the second straight day on Thursday and sticks to its modest intraday gains through the early European session. Currently placed around the 1.3400 mark, the pair is now looking to build on the overnight bounce from the 1.3340 area, or a nearly two-week low.
The Canadian Dollar is undermined by the Bank of Canada's pivot on Wednesday, saying that it was time to pause the rate-hiking cycle, which, in turn, is seen lending support to the USD/CAD pair. Meanwhile, subdued action around crude oil prices fails to benefit the commodity-linked Loonie. That said, the underlying bearish sentiment surrounding the US Dollar could act as a headwind for the major, at least for the time being.
Firming expectations that the Federal Reserve will soften its hawkish stance keep the USD bulls on the defensive near an eight-month low. In fact, the CME's FedWatch Tool points to over a 90% probability for a smaller 25 bps rate hike at the next FOMC meeting that concludes on February 1. This will mark a further moderation in the pace of the rate-hike cycle, which is seen weighing on the US Treasury bond yields and the buck.
That said, concerns about a deeper global economic downturn help limit the downside for the safe-haven greenback. Traders also seem reluctant from placing directional bets and prefer to wait for the release of the Advance US Q4 GDP later during the early North American session. Thursday's US economic docket also features Durable Goods Orders and New Home Sales data, which might drive the USD and provide some impetus to the USD/CAD pair.
Traders this week will also confront the release of the US Core PCE Price Index on Friday, which will play a key role in influencing the Fed's rate strategy. The key focus, however, will remain glued to the outcome of a two-day FOMC monetary policy meeting, due to be announced next Wednesday.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.