USD/CAD on a seesaw toward multi-week highs
Daily Currency Update
The Canadian dollar was seen on a backfoot against the US dollar after the positive employment data from the United States and Fitch downgraded the US Government’s credit rating. USD/CAD trades in the positive territory for the second straight day today and inched back closer to over a 3-week high poked the previous day. Despite the news that Fitch downgraded the US government's credit rating to AA+ from AAA, prospects for another 25-bps rate hike by the Federal Reserve may act as a tailwind for the Greenback and support the USD/CAD pair for slight dip-buying. WTI was last seen trading at the 79.24 levels. The recent bullish run-up in Crude Oil prices to the highest levels since April 17 may underpin the commodity-linked Loonie too. The benchmark Canadian government’s10-year bond yields rose 1.7 basis points to 3.62%.Key Movers
The euro (EUR) accelerated its losses and is under increasing selling pressure against the Greenback (USD), taking the EUR/USD back to the 1.0950 levels, the EUR/USD pair was seen adding to its losses for the third consecutive session so far. The weak EUR is the result of the release of positive employment data from the US and Fitch downgrading the US government’s credit rating. The lack of major data releases from the Eurozone leaves the market participants to take cues from the US data releases.The Bank of England (BoE) is scheduled to announce its key Interest Rate Decision on Thursday and is anticipated to hike rates by 25 basis points to 5.25%. Markets are also weighing in the options of a larger hike, 50 basis points to 5.50%. Inflation in the United Kingdom economy has been very sticky and most stubborn amongst the G-7 economies; hence, the BoE isn’t in a position to halt the rate-tightening cycle. Sterling was seen struggling against the Greenback and the GBP/USD pair was last seen trading at 1.2692 levels.
WTI crude oil was seen working hard to keep its bullish momentum intact after a 4-day uptrend when it touched the highest level since April 17. WTI was last seen trading at the 79.24 levels.
Expected Ranges
- EUR/CAD: 1.4555 - 1.4627 ▼
- GBP/CAD: 1.6913 - 1.7033 ▼
- AUD/CAD: 0.8718 - 0.8798 ▼
- USD/CAD: 1.3269 - 1.3347 ▲