Economy Forex News

USD/CAD moves away from lows, remains bearish

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  • A combination of factors triggered further selling around USD/CAD on the last day of the week.
  • A generally positive risk tone affected the safe-haven dollar and exerted downside support.
  • A rebound in crude oil, stronger Cnadian data supported the Canadian dollar and contributed to the sell-off.

USD/CAD updated daily lows in reaction to better-than-expected Canadian macroeconomic data, although it quickly recovered a few pips thereafter. The pair was trading around the 1.2335 region, losing almost 0.25% on the day.

Despite fresh supply on Friday. The pair lost most of the previous day’s recovery gains from levels below 1.2300, or four-month lows. The decline attributed to a renewed selling bias in the U.S. dollar. And additionally a rebound in crude oil prices, which tend to support the commodity-linked Canadian dollar.

USD/CAD

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Investor confidence soared on the final day of the week

Investor confidence soared on the final day of the week as concerns about a credit crunch in China’s property sector eased. This reflected in a generally positive tone in equity markets. Which in turn, dented the dollar’s status as a relative safe-haven asset.

On the other hand, the Canadian dollar benefited from a further rise in crude oil prices. And additionally slightly better-than-expected domestic data. Retail sales rose by 2.1% month-over-month in August. Compared to the 0.6% decline reported in July and the expected growth of 2%.

However, higher US Treasury yields amid Fed expectations of early tightening should help limit deeper USD losses and act as a tailwind for USD/CAD. Investors seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation.

Therefore, the market’s focus would be on Fed Chairman Jerome Powell’s remarks during a press conference to be held today, Friday.

Technical levels

OVERVIEW
Today’s Last Price 1.2338
Daily Rate -0.0032
Today’s Daily % Change -0.26
Daily Open 1.237

TRENDS
20 Daily SMA 1.2519
50 Daily SMA 1.2604
100 Daily SMA 1.2512
200 Daily SMA 1.25

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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