USD/CAD soars amid greenback rebound

Key Movers

The US Dollar Index (DXY) rebounded to 102.4 after four consecutive days of losses. This was largely driven by conflicting economic indicators ahead of the upcoming jobs report. Recent data revealed a better-than-anticipated drop in weekly jobless claims at the close of 2023, along with US private businesses surpassing hiring expectations in December. Notably, Federal Open Market Committee (FOMC) meeting minutes from Wednesday indicated a likelihood of Federal Reserve officials reducing interest rates in 2024, although the timing of such rate cuts remains uncertain.

The euro traded near 1.0960 as investors analyzed a barrage of inflation and PMI data coupled with the December meeting minutes from the Federal Reserve. Germany and France experienced upticks in their December inflation rates, primarily driven by rising energy expenses, in line with market expectations. Additionally, the PMI survey unveiled the seventh straight month of contraction in the Eurozone private sector activity, albeit at a slower pace than initially anticipated.

Surpassing 1.27, the British pound experienced a notable surge. The GBP was supported by recent data affirming the resilience of the UK economy to elevated interest rates. In November, consumer borrowing in the UK expanded by £2.0 billion, marking the highest expansion since March 2017 and surpassing the anticipated rise of £1.4 billion. Furthermore, home purchase loans reached 50,100, exceeding expectations. Conclusively, the final PMI survey revealed that Britain's services output exhibited stronger growth in December than initially estimated, reaching a seven-month high in optimism.