USD/CAD climbs back closer to mid-1.3400s, weekly high ahead of US inflation data – Crypto News – Crypto News
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USD/CAD erases Tuesday's losses on a firm US dollar ahead of FOMC minutes USD/CAD erases Tuesday's losses on a firm US dollar ahead of FOMC minutes

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USD/CAD climbs back closer to mid-1.3400s, weekly high ahead of US inflation data – Crypto News

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  • USD/CAD attracts fresh buying on Thursday, though the upside potential seems limited.
  • A modest downtick in oil prices undermines the Loonie and lends support to the majors.
  • Smaller Fed rate hike bets weigh on the USD and could cap gains ahead of the US CPI.

The USD/CAD The pair regains positive traction on Thursday and steadily climbs to the top end of its weekly range, closer to the mid-1.3400s during the early European session. The intraday move up, however, lacks bullish conviction and is more likely to remain capped ahead of the release of the latest US consumer inflation figures.

In the meantime, a modest pullback in crude oil prices from over a one-week high touched on Wednesday undermine the commodity-linked Loonie and lend some support to the USD/CAD pair. Despite the recent optimism led by China’s pivot away from its zero-COVID policy, worries that a deeper global economic downturn will hurt demand act as a headwind for the black liquid. That said, subdued US Dollar price action might hold back traders from placing aggressive bullish bets around the majors and keep a lid on any further gains.

In fact, the USD Index, which measures the greenback’s performance against a basket of currencies, languishes near a seven-month low amid the prospects for smaller rate hikes by the fed, Investors now seem convinced that the US central bank will soften its hawkish stance amid signs of easing inflation. This is evident from a further decline in the US Treasury bond yields and continues to weigh on the greenback. Traders, however, might prefer to wait for the crucial US CPI report before determining the near-term trajectory.

The Fed policymakers have indicated that they remain committed to combating high inflation and that rates could remain elevated for longer, or until there is clear evidence that consumer prices are falling. Hence, a stronger US CPI print will lift bets for a more hawkish Fed and push the USD higher, allowing the USD/CAD pair to build on this week’s recovery from its lowest level since November 25. Conversely, a softer reading will set the stage. for an extension of the recent rejection slide from the 1.3700 round-figure mark.

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