USD/CAD drops towards 1.3300 as firmer Oil joins US Dollar retreat ahead of Fed’s favorite inflation data – Crypto News – Crypto News
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USD/CAD drops towards 1.3300 as firmer Oil joins US Dollar retreat ahead of Fed’s favorite inflation data – Crypto News

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2 years ago

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  • USD/CAD remains pressured around 10-week low, down for the second consecutive day.
  • US Dollar fades post-GDP rebound amid mixed details.
  • Oil price stays firmer in hopes of more energy demand, softer USD.
  • Cautious mood ahead of US Core PCE Price Index for December probes Loonie pair traders.

USD/CAD takes offers to refresh the intraday low near 1.3315 while keeping the previous day’s south-run to a 2.5-month low during early Friday. In doing so, the Loonie pair cheers broad US Dollar weakness, as well as firmer prices of Canada’s main export item WTI crude oil, ahead of the key US data.

US Dollar Index (DXY) retreats to 101.70, following a corrective bounce off an eight-month low backed by overall upbeat US economics.

On Thursday, the US Bureau of Economic Analysis (BEA) released the first estimate of the US fourth quarter (Q4) Gross Domestic Product that marked an annualized growth rate of 2.9% versus 2.6% expected and 3.2% prior. On the same line, the Durable Goods Orders jumped 5.6% in December versus 2.5% market forecast and -1.7% upwardly revised prior.

It should be noted, however, that the growth of Personal Consumption Expenditures Prices weakened to 3.2% QoQ in Q4 compared to 4.3% marked forecasts and prior readings. Further, Core Personal Consumption Expenditure (PCE) eased to 3.9% QoQ for Q4 from 4.7% previous reading, versus 5.3% expected. As a result, the mixed details of the US data The teased DXY bears after an initial favor.

Elsewhere, wti Crude oil remains mildly bid during the three-day winning streak, near $81.35 by the press time, as a softer US Dollar joins hopes of more energy demand from the US and China. Also keeping the commodity buyers hopeful are the expectations of no change in the output cut policy of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, including Russia, collectively known as OPEC+, up for a meeting on February 01.

Amid these plays, the US Treasury bond yields remain firmer but the S&P 500 Futures print mild losses despite the upbeat closing of Wall Street.

Looking ahead, the USD/CAD bear’s dominance depends upon the US Core PCE – Price Index for December, expected to remain unchanged at 0.2% MoM, as the Fed’s dovish hike is almost priced-in.

technical analysis

A clear downside break of the 2.5-month-old ascending support line, now with resistance around 1.3345, directs USD/CAD towards the November 2022 low near 1.3225.

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