- 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.
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.
Today’s Last Price 1.2338
Daily Rate -0.0032
Today’s Daily % Change -0.26
Daily Open 1.237
20 Daily SMA 1.2519
50 Daily SMA 1.2604
100 Daily SMA 1.2512
200 Daily SMA 1.25