USD/CAD rebounds above 1.3650 amid firmer US Dollar, lower crude oil prices

Source Fxstreet
May 7, 2024 07:00
  • USD/CAD holds positive ground near 1.3685 on the rebound of USD on Tuesday. 
  • Fed’s Barkin noted the current rate level should cool the economy enough to bring down inflation to the 2% goal.
  • The BoC potentially getting closer to rate cuts relative to the Fed, which might drag the CAD lower. 

The USD/CAD pair gains traction around 1.3685 during the early European trading hours on Tuesday. The rebounds of Greenback and the decline of oil prices provide some support to the pair. Investors will take more cues from the Canadian Ivey Purchasing Managers Index (PMI) for April, due later in the day. 

The recent US labor market data and comments from Federal Reserve (Fed) officials have triggered the speculation of rate cuts. Richmond Fed President Thomas Barkin said on Monday that the current interest rate level should cool the economy enough to bring down inflation to the Fed's 2% goal. New York Fed President John Williams noted that "eventually" the US Fed will cut interest rates, although he did not give a time frame.

Meanwhile, the US Dollar (USD) strengthens broadly amid the uncertainties surrounding the geopolitical tensions in the Middle East, which boost the safe-haven currencies like the Greenback. Israel's war cabinet voted to continue the military attack on Hamas, and Israeli troops launched strikes on Gaza's southernmost city on Monday, hours after Hamas announced it would accept terms based on a cease-fire proposal by Egyptian and Qatari mediators, per New York Times. 

On the Loonie front, an FX strategist from CIBC Capital Markets expects that there are going to be some headwinds for the Canadian Dollar (CAD) in the near term as the Bank of Canada (BoC) potentially gets closer to rate cuts relative to the Fed. This, in turn, is likely to cap the downside of USD/CAD put for the time being. Apart from this, the decline in oil prices near two-month lows exerts some selling pressure on the commodity-linked Loonie as Canada is the leading exporter of oil to the United States.  

USD/CAD

Overview
Today last price 1.3684
Today Daily Change 0.0018
Today Daily Change % 0.13
Today daily open 1.3666
 
Trends
Daily SMA20 1.3711
Daily SMA50 1.3611
Daily SMA100 1.3513
Daily SMA200 1.3556
 
Levels
Previous Daily High 1.3697
Previous Daily Low 1.3648
Previous Weekly High 1.3785
Previous Weekly Low 1.361
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3667
Daily Fibonacci 61.8% 1.3678
Daily Pivot Point S1 1.3644
Daily Pivot Point S2 1.3621
Daily Pivot Point S3 1.3594
Daily Pivot Point R1 1.3693
Daily Pivot Point R2 1.372
Daily Pivot Point R3 1.3742

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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