USD/CAD trims part of its modest intraday gains, manages to hold above 1.3200 – 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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USD/CAD trims part of its modest intraday gains, manages to hold above 1.3200 – Crypto News

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  • USD/CAD struggles to capitalize on its modest intraday positive move on Tuesday.
  • An uptick in Oil prices underpins the Loonie and caps gains amid fresh USD selling.
  • Rising US bond yields, a softer risk tone helps limit losses for the buck and the majors.

The USD/CAD pair attracts some intraday sellers following an early uptick to the 1.3235-1.3240 area on Tuesday and retreats to the lower end of its daily range during the early European session. The pair currently trades just above the 1.3200 mark and remains well within striking distance of its lowest level since September 2022 touched on Friday.

The US Dollar (USD) struggles to capitalize on its modest intraday gains and for now, seems to have stalled its recent recovery from over a one-month low witnessed over the past two days. Adding to this, a modest uptick in crude oil prices underpins the commodity-linked Looney and acts as a headwind for the USD/CAD pair. Despite the Federal Reserve’s (Fed) hawkish Outlook, signaling that borrowing costs may still need to rise as much as 50 bps by the end of this year, investors seem convinced that the US central bank is nearing the end of its year-long rate-hiking cycle. This, in turn, keeps a lid on any meaningful upside for the Greenback.

The markets, however, are still pricing in another 25 bps lift-off at the July FOMC meeting, which triggers a fresh leg up in the US Treasury bond yields. This, along with a generally weaker tone around the equity markets, could lend some support to the safe-haven Greenback and help limit the downside for the USD/CAD pair, at least for the time being. The market sentiment remains fragile on the back of growing worries about a global economic slowdown, particularly in China. This, to a greater extent, overshadows an interest rate cut by the People’s Bank of China (PBoC), which tempers investors’ appetite for riskier assets and could benefit the buck.

Traders might also refrain from placing aggressive bets and prefer to move to the sidelines ahead of Fed Chair Jerome Powell’s two-day congressional testimony, starting this Wednesday. Powell’s comments will be closely scrutinized for fresh clues about the Fed’s future rate-hike path, which, along with speeches by a slew of influential FOMC members, will play a key role in driving the USD demand this week. Traders this week will also face the release of the flash pmi prints from the US. Apart from this, Oil price dynamics should contribute to producing some meaningful trading opportunities around the USD/CAD pair.

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