Canadian Dollar is a mixed bag on Friday, softer overall on the week

• Canadian Dollar (USD) sees slight gains against US Dollar following US PPI miss.
• Canada economic calendar empty of meaningful data until next Tuesday’s CPI.
• Crude Oil up again on supply chain fears.

The Canadian Dollar is a mixed bag in Friday trading, seeing moderate gains against the US Dollar (USD) after a downside print in the US Producer Price Index forced the Greenback lower across the board. With a mixed performance on the day for the CAD, the Loonie is in the red against most of its major currency peers for the week, save for a slight uptick against the USD from Monday’s opening bids.

Loonie traders will have to wait until next Tuesday for the next print of Canada’s Consumer Price Index (CPI) inflation. However, Monday sees low-impact Manufacturing Sales from November as well as the Bank of Canada’s (BoC) latest Business Outlook Survey.

Crude Oil markets remain tense about Middle East conflicts potentially impacting the global barrel trade. As the ongoing spat with Houthi rebels continues, more firms continue to divert tankers and cargo ships from the Red Sea and the Suez Canal in order to take a longer trip around the continent of Africa.

Daily digest market movers: Canadian Dollar gets a slight leg up on lower than expected US PPI

• The Canadian Dollar is up a tenth of a percent against the Greenback on Friday as the US Dollar gets sold off amidst markets increasing their rate-cut bets from the Federal Reserve (Fed).
• US PPI figures missed the mark on Friday.
• December’s US PPI declined by 0.1% versus the forecasted 0.1% increase, adding to November’s print which saw a downside revision from 0.0% to -0.1% as well.
• US Core annualized PPI through December came in at 1.8%, down from the previous period’s and below the median market forecast of 1.9%.
• With inflation easing back faster than expected at the producer level, markets are once again ramping up bets of a faster, deeper pace of rate cuts from the Fed.
• Fed swaps are pricing in additional monetary easing through 2024, with short-term interest-rate futures on the rise and markets betting on 160 basis points of cuts from the Fed for the year, up from 154 bps.
• Crude Oil market tensions over Middle East turmoil are on the rise once again as US and UK naval forces launch strikes against Houthi targets, a move that is sure to draw ire from Iran, which openly backs Houthi activities in and around Yemen.

Technical Analysis: Canadian Dollar finds a slight foothold against US Dollar on Friday

The Canadian Dollar (CAD) is slightly up against the Greenback heading into the end of the trading week, pushing the USD/CAD pair down into the 1.3350 neighborhood.

The pair rose to a new 2024 high of 1.3443 on Thursday, but price action is drifting back into the midrange with intraday chart action knocking against the 200-hour Simple Moving Average (SMA) near 1.3360. A near-term pattern of higher lows is set to break down as the USD/CAD drifts sideways heading into next week.

Daily candlesticks have the USD/CAD continuing to trade on the low side of the 200-day SMA near 1.3500, and a descending 50-day SMA is set for a bearish crossover of the longer moving average, which could form a technical ceiling for the pair moving forward. The pair is currently up 0.73% from 2024’s opening bids and has climbed 1.26% from December’s late low of 1.3775.

USD/CAD Hourly Chart

USD/CAD Daily Chart