USD/CAD consolidates above 1.30
The USD/CAD forex pair stabilized just below multi-month highs at 1.3000 on Thursday, as a slowdown in global macro risk appetite coupled with a strong US safe haven supported the pair. At current levels near 1.3020, USD/CAD is trading up about 0.25% on the day and was close to hitting an 18-month high on Tuesday just above 1.3050.
- USD/USD is consolidating just above 1.3000, not far from the 18-month high of 1.3050.
- A strong US dollar in forex on the back of recent US inflation data and risk flows outweighs the rise in oil prices.
- Focuses on upcoming comments from Tony Gravell of BoC at 16:30BST.
With the US CPI and PPI data over the past couple of days both showing insufficient containment (at least from the Fed’s point of view) of inflationary pressures, it’s no surprise that the US dollar is doing so well. The data means the Fed is likely to continue with its current aggressive tightening plans, and with concerns that central bank tightening will weigh heavily on global equities, the dollar is also supported as a safe haven.
The bounce off the previous session’s lows in crude oil prices failed to revive the Canadian dollar, which looks set to continue to trade in the red ahead of comments from Bank of Canada deputy governor Tony Gravel. Gravel can provide additional details on the scope and timing of the Bank of Canada’s monetary tightening plans. However, forex traders should note that the hawkish stance of the Bank of Canada has not been able to protect the Canadian dollar from the rise in the US dollar in recent weeks and is unlikely to start this Thursday.
Joel Frank, FXStreet
Joel Frank graduated in Economics from the University of Birmingham and has been a full-time financial market analyst since 2018, specializing in highlighting the impact of changes in the global economy on financial asset classes such as currencies, equities, bonds and commodities. Joel also has a strong interest in technical analysis.
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