USD/CAD bounces back from weekly lows
Daily Currency Update
USD/CAD recovered from recent losses during the last two sessions, trading at levels above 1.3700 in the Asian session today. The upward momentum of the USD/CAD pair was driven by the strengthened US dollar and influenced by a risk-off sentiment. Furthermore, the decrease in crude oil prices played a role in this movement, particularly considering Canada's position as the largest oil exporter to the United States. West Texas Intermediate (WTI) oil was trading lower, hovering around $76.10 per barrel at the time of writing. Furthermore, robust economic data from Canada may be reinforcing the strength of the Canadian dollar. Monthly manufacturing sales posted a 0.4% increase, surpassing the anticipated 0.1% decline in September. Additionally, wholesale sales month-over-month demonstrated improvement, rising from 1.8% to 0.4%.Key Movers
The US dollar traded in a tight range yesterday and this morning after a reported increase in jobless claims. Weekly jobless claims increased 13,000 to 231,000 this week. Traders will be looking for further clues and confirmation if the Federal Reserve is truly done hiking rates, with bets mounting on when the Fed will cut first. Meanwhile treasury yields are sinking lower, and equities are soaring, which means that the rate differential story between the greenback and other currencies is losing its importance. The USD is striving to extend its recovery following Tuesday's downturn. However, progress is not as swift as anticipated, with only incremental gains for the US dollar index (DXY).The euro maintained a strong position against the USD, encouraging the EUR/USD pair to retain its daily gains at the highest weekly range, roughly between 1.0870 and 1.0880 today. Simultaneously, the US dollar experienced marginal declines, hovering near 104.30. This occurs amid a renewed downward trend in US yields across various sectors and increased market speculation regarding the Federal Reserve contemplating interest rate cuts sometime in the summer of 2024.
GBP/USD rebound above 1.2400, benefiting from recent US dollar weakness. The pair's future movement will be influenced by overall market sentiment and statements from the Federal Reserve. Weak inflation figures from the UK exerted pressure on the pound during yesterday’s European trading hours. However, the US dollar gained support later in the day as data revealed that Retail Sales in October declined by a smaller margin than anticipated.
The Australian dollar ended a series of victories despite a substantial rise in new jobs within the country. Australia's Employment Change surged to 55,000 in October, while the Unemployment Rate met expectations by rising to 3.7%. Surprisingly, the US Producer Price Index (PPI) showed an unexpected decrease of 0.5%, contrasting with the anticipated 0.1% increase. Additionally, China's House Price Index declined by 0.38% in October, signaling a deteriorating situation in the property sector.
Expected Ranges
- EUR/CAD: 1.4821 - 1.491 ▲
- GBP/CAD: 1.6961 - 1.7114 ▼
- AUD/CAD: 0.8859 - 0.8925 ▼
- USD/CAD: 1.3658 - 1.3755 ▲