Home Daily Commentaries USD/CAD is still struggling

USD/CAD is still struggling

Thursday 1 December, 2022

Daily Currency Update

USD/CAD is struggling to make any significant progress due to the overall selling of USD and remains around 1.3400 mark. A modest decline in Crude Oil prices from a one-week high on Wednesday weakened the commodity-linked Canadian dollar and helped sustain the USD/CAD pair. WTI crude oil prices softened slightly to around $80.60 per barrel, momentarily halting the three-day rally near weekly highs, as investors speculate that global oil producers may not announce any policy changes during this weekend's OPEC+ meeting.

Key Movers

On Thursday, the dollar slumped to a three-month low, while US stock futures paused after earlier strong gains driven by China's more relaxed approach to COVID and Federal Reserve Chair Jerome Powell's pledge of a slower US rate-hiking pace. After Jerome Powell suggested that a 50bp hike is now likely at the December 14 FOMC meeting, it seems as though US interest rates will be cut back soon. As anticipated, US annual Core PCE inflation decreased to 5% in October. The US dollar lost ground against its competitors and was trading at 105.05 on the US dollar Index, down 0.75% for the day. The US Department of Labor published data on Thursday showing that there were 225,000 initial jobless claims in the week ending November 26. This week's print of 241,000 (revised from 240,000) was an improvement from the previous week and beat analysts' predictions of 235,000. The most recent eurozone CPI report showed that headline inflation unexpectedly fell to 10.0% in November, while the core rate remained at 5.0%. The inflation rate appears to be stabilizing, adding to optimism. This, combined with the weakening of economic activity data during the winter period should encourage the ECB to adopt a less hawkish policy stance Germany's retail sales figures for October showed a 2.8% month-on-month decrease, versus expectations of a -0.6% decline and the previous figure of 0.9%. The data was released by Destatis on Thursday. The EUR however showed little signs of being affected by German data.

Expected Ranges

  • EUR/CAD: 1.3952 - 1.4085 ▲
  • GBP/CAD: 1.614 - 1.6411 ▲
  • AUD/CAD: 0.9054 - 0.9162 ▲
  • USD/CAD: 1.3397 - 1.3569 ▲