Canadian Dollar performance depends on Unemployment rate
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Daily Currency Update
USDCAD faced selling pressure while attempting to deliver a breakout of the Ascending Triangle formation in a four-hour timeframe. The chart pattern indicated a volatility contraction but with a positive bias. The Unemployment Rate had risen to 5.9% from 5.8% in December.Investors were looking to the release of Trade Balance data from the US and Canada for some impetus ahead of the EIA data on US Oil inventory, due later during the North American session. Apart from this, speeches by Fed officials influenced the USD, which, along with Oil price dynamics, provided a fresh impetus to the USDCAD pair.
Key Movers
WTI prices had gained momentum as the EIA adjusted its projection for a more modest increase of 170K bpd in US oil production for 2024, impacting the CAD given its correlation with oil prices.The USD had struggled to find demand against major currencies, including the Euro (EURUSD) and the British Pound (GBPUSD), and had contributed to the CAD's relative strength. Meanwhile, the Australian Dollar (AUD) had risen as the USD weakened, supported by subdued US bond yields and bolstered by hawkish comments from RBA's Bullock. Fed Chair Powell had emphasized on closely monitoring inflation's movement toward the 2% target.
Expected Ranges
- EUR/CAD: 1.4494 - 1.4533 ▲
- GBP/CAD: 1.6981 - 1.7031 ▲
- AUD/CAD: 0.8787 - 0.8813 ▲
- USD/CAD: 1.3457 - 1.3538 ▼