USD/CAD appreciates to near 1.3650 due to a downward correction in Oil prices

Source Fxstreet
May 29, 2024 02:17
  • USD/CAD appreciates after Fed’s Neel Kashkari suggested that a rate hike might still be possible.
  • The US Dollar gained ground due to the appreciation in the US Treasury yields.
  • The decline in the WTI price put pressure on the commodity-linked Canadian Dollar.

USD/CAD edges higher for the second consecutive day, trading around 1.3650 during the Asian hours on Wednesday. The emergence of risk aversion drives investors toward the US Dollar (USD), underpinning the USD/CAD pair.

On Tuesday, the risk-on sentiment turned sour after Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, suggested that a rate hike might still be possible. Kashkari stated, “I don’t think anybody has totally taken rate increases off the table,” and expressed uncertainty about the disinflationary process, predicting only two rate cuts.

The appreciation in the US Treasury yields also supported the Greenback. The US Dollar Index (DXY), which measures the USD against six major currencies, was trading higher around 104.70, with 2-year and 10-year US Treasury yields at 4.96% and 4.54%, respectively, at the time of reporting.

Moreover, the mid-tier US Housing Price Index (MoM) for March was underperforming, with March's number coming in at 0.1% against 1.2% for February, where 0.5% was expected. On Wednesday, New York Fed President John Williams is scheduled to speak, and the Fed's Beige Book will be released, providing an overview of the current US economic situation based on interviews with key business contacts, economists, market experts, and other sources from the 12 Federal Reserve Districts.

On Loonie’s front, the downward correction in the crude Oil prices put pressure on the commodity-linked Canadian Dollar (CAD), given the fact that Canada is the largest Oil exporter to the biggest Oil consumer United States (US).

Canada’s Industrial Product Price rose by 1.5% month-over-month in April, above market forecasts of 0.6% to reach a fresh 8-month high, and up from an upwardly revised 0.9% uptick in March. The Raw Materials Price Index increased 5.5% month-over-month in April, compared to the previous rise of 4.3% and above the expected increase of 3.2%.

USD/CAD

Overview
Today last price 1.3652
Today Daily Change 0.0006
Today Daily Change % 0.04
Today daily open 1.3646
 
Trends
Daily SMA20 1.3668
Daily SMA50 1.3653
Daily SMA100 1.3571
Daily SMA200 1.3573
 
Levels
Previous Daily High 1.3654
Previous Daily Low 1.3615
Previous Weekly High 1.3744
Previous Weekly Low 1.3596
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3639
Daily Fibonacci 61.8% 1.363
Daily Pivot Point S1 1.3623
Daily Pivot Point S2 1.3599
Daily Pivot Point S3 1.3584
Daily Pivot Point R1 1.3662
Daily Pivot Point R2 1.3677
Daily Pivot Point R3 1.3701

 

 

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