Hi
The Bank of Canada raise rates by a surprise 100 basis points this week, preemptively tightening policy.
Despite the price high, the CAD weekend further yesterday helped by overall USD buying.
The Bank of Canada raise rates by a surprise 100 basis points this week, preemptively tightening policy.
Despite the price high, the CAD weekend further yesterday helped by overall USD buying.
Comment:
Helping the move higher in the CAD is a rebound in crude oil prices.
Comment:
Beijing's zero covid policies add to the greenback's safe-haven appeal
Comment:
At this point in time, any loosening is limited and uncertainty boosts the safe-haven dollar. Moreover, lower output by China's factories is adding to supply-chain issues and boosting inflation – fueling the Fed's tightening cycle. While there is no change in Beijing's policies, the dollar would likely remain bid.
Comment:
The broad trend is already risk-off, boosting the greenback .
Comment:
Canadian consumer and private sector are both largely unable to shoulder higher costs .
Comment:
Fitch took away Canada's AAA rating yesterday, citing the pandemic-inspired increase in the country's deficit and debt.
Comment:
Investors now look forward to important US macro data for short-term trading opportunities.
Comment:
On Thursday, two of the Federal Reserve's most policymakers pushed back against market expectations for a 100 bps rate hike later this month. This led to a further decline in the US Treasury bond yields, which, in turn, acted as a headwind for the USD and exerted some downward pressure on the USD/CAD pair.
Comment:
Therefore, the USD/CAD first support will be 1.3000. A break below will send the pair sliding towards July 13 low at 1.2936, followed by a push lower to the 50-day moving average (DMA) at 1.2862.