USD/CAD weakens for third straight day
Tuesday 14 March, 2023
Daily Currency UpdateThe USD/CAD pair spreads its recent pullback from the 1.3860 mark, its highest level since October 2022, and remains under some selling pressure for the third successive day. The intraday downfall is picking up pace following the publication of the US consumer inflation figures. This is consequently dragging spot prices to a one-week low, around the 1.3660 mark during the early North American session. Canada’s manufacturing sales for January grew to 4.1% versus the 3.9% expectations. The US CPI data release confirmed market expectations that the Fed could slow, or even pause its rate-hiking cycle in the aftermath of the strain on the US banking system. This strain also applies some pressure on the US dollar and appears to be a key factor weighing on the USD/CAD pair.
Key MoversToday the US Bureau of Labor Statistics reported that yearly inflation in the United States, as measured by the Consumer Price Index (CPI), weakened to 6% in February from 6.4% in January. On a monthly basis, the CPI was up 0.4% as expected by analysts. The USD’s immediate response to the February inflation data is still out for debate, the US dollar index (DXY) was nearly unchanged on the day at 103.630, compared to 103.692 before the data was released. The DXY is struggling to find traction today after the inflation report. The market has shown that the CPI release wasn't hot enough to scare the Federal Reserve which leaves them in a somewhat delicate position. Some analysts estimate that the Fed cannot fall behind the inflation curve as it risks credibility. Likewise, the delayed impact of previous tightening is now starting to surface, as seen through the recent Silicon Valley Bank (SVB) disaster. West Texas Intermediate (WTI) oil price is falling flat today amongst a softer US dollar and hushed risk sentiment. Touching briefly on Monday’s price action, WTI has fallen to a low of $72.31. Furthermore, bearish crude oil prices undermine the commodity-linked Loonie and might act as a tailwind for the USD/CAD pair.
- EUR/CAD: 1.4626 - 1.4751 ▼
- GBP/CAD: 1.6614 - 1.6741 ▼
- AUD/CAD: 0.6634 - 0.6712 ▼
- USD/CAD: 1.366 - 1.375 ▼