Canadian Dollar slips after markets go USD-bullish on US PMI data beat – Crypto News – Crypto News
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USD/CAD nosedives from six-week highs, back below 1.3000 USD/CAD nosedives from six-week highs, back below 1.3000

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Canadian Dollar slips after markets go USD-bullish on US PMI data beat – Crypto News

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  • Canadian Dollar falls back as investors pile into USD once more.
  • Crude Oil extends Monday’s losses, evaporating CAD support with it.
  • The Bank of Canada is due for its latest rate statement on Wednesday.

The Canadian Dollar (CAD) has slipped back into its lowest bids in almost three weeks against the US Dollar (USD) as broad-market flows reverse direction and pile back into the Greenback following a bumper reading for the US Purchasing Managers’ Index (PMI) that soundly thumped market expectations.

The Bank of Canada (BoC) is set to announce its latest rate call on Wednesday, and Loonie traders will be looking for the Canadian central bank to hold their reference rate at 5% while leaving the way open for more potential hikes to come later on. Market participants expect little change in the BoC’s forward guidance as Canadian policymakers grapple with a domestic economy that is seeing flagging growth indicators but still high inflation on the back of soaring energy prices.

Crude Oil prices are seeing a downside snap on Tuesday, with West Texas Intermediate (WTI) adding to Monday’s decline. The oil-backed Loonie is seeing its supportive base go up in smoke as crude barrels backslide, pushing the CAD into its lowest prices against the USD since October 5.

Daily Digest Market Movers: Canadian Dollar slips as broader market picks up the Greenback

  • CAD fumbles to an almost three-week low as investors bid the USD.
  • US October PMIs beat the Street, climbing over Wall Street’s forecasts to chalk in gains for the productivity indicator.
  • The US Manufacturing PMI printed at a flat 50 versus the expected 49.5 decline from the previous 49.8 reading.
  • The US Services PMI gave an impressive reading, coming in at 50.9 and handily vaulting over the forecasted 49.9 against September’s 50.1.
  • The dual PMI beats sent the Composite PMI back to 51, its highest reading since July.
  • Crude Oil continues to slide, dragging down CAD support with it.
  • WTI barrels are down over 7.5% from Friday’s peak.
  • BoC Preview: keeping rates on hold and the prospect of further hikes alive

Technical Analysis: Canadian Dollar gives up more ground as investors favor the US Dollar, USD/CAD taps 1.3755

The Canadian Dollar (CAD) is down almost 0.7% against the US Dollar (USD) in Tuesday’s trading session as markets go broadly USD bullish, taking the USD/CAD pair to its highest bids in almost three weeks.

The USD/CAD pinged 1.3755 on Tuesday after reversing direction from an intraday low of 1.3661. The next immediate barrier for USD/CAD bulls will be October’s early high of 1.3785, while the floor for sellers currently sits at the last swing low near 1.3569.

The US Dollar has gained nearly 5% against the Canadian Loonie since July’s low point near 1.3090, and the USD/CAD continues to find technical support from the 50-day Simple Moving Average (SMA) currently lifting into 1.3600.

An extended rally will see the USD/CAD set for a challenge of 2023’s highs at 1.3862, while a full bearish reversal will find the floorboards near the 200-day SMA currently parked just south of 1.3500.

USD/CAD Daily Chart

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the .

  USD EUR GBP CAD AUD JPY NZD CHF
USD   0.76% 0.72% 0.34% -0.29% 0.07% 0.17% 0.32%
EUR -0.77%   -0.04% -0.44% -1.07% -0.70% -0.60% -0.46%
GBP -0.73% 0.03%   -0.39% -1.03% -0.67% -0.57% -0.42%
CAD -0.34% 0.43% 0.39%   -0.63% -0.27% -0.17% -0.03%
AUD 0.30% 1.06% 1.01% 0.63%   0.36% 0.47% 0.60%
JPY -0.07% 0.69% 0.64% 0.27% -0.39%   0.10% 0.23%
NZD -0.17% 0.61% 0.56% 0.17% -0.47% -0.10%   0.14%
CHF -0.32% 0.45% 0.41% 0.03% -0.61% -0.24% -0.15%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Risk sentiment FAQs

In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

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