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USD/CAD comes under selling pressure

Thursday 23 February, 2023

Daily Currency Update

USD/CAD came under selling pressure on Thursday and fell from its previous day high of 1.35650, its highest level since January 6. The pair currently trades around the 1.35350 mark. Crude oil prices rebounded and partially erased losses from the previous day amid reports indicating that Russia's supply cuts will be deeper than initially announced. West Texas Intermediate Crude (WTI) trades around 75.760.

Key Movers

The DXY (dollar index) strengthened near 104.5 on Thursday, remaining close to its highest level in seven weeks. Minutes from the Federal Reserve’s last meeting showed that policymakers largely agreed to continue raising interest rates in order to bring inflation back down within the target. Today's major economic data for the US features the Q4 gross domestic product growth. Data released by the US Bureau of Economic Analysis (BEA) showed that GDP for the fourth quarter had expanded at an annualized rate of 2.7%, coming in below the market expectation of 2.9%. In its publication, the BEA explained: "The updated estimates primarily reflected a downward revision to consumer spending that was partly offset by an upward revision to nonresidential fixed investment." The US weekly initial jobless claims for the week ending February 18 came in at 192,000 following the previous week's print of 195,000 and beating market expectation of 200,000.00. EUR/USD traded below 1.06290. The EU consumer price index, both overall and core for January, was published earlier today. Overall Inflation for the Eurozone as measured by the HICP Final YoY (Jan) came in at 8.6%, down from the previous reading of 9.2%. In contrast, core inflation rose to 5.3%, a new record, which is likely to confirm the ECB's decision to raise interest rates by 50 basis points next month. GBP/USD trades near 1.20630 levels. BOE member Catherine Mann commented earlier that based on the available data more monetary policy tightening will be necessary and rate cuts are not imminent.

Expected Ranges

  • EUR/CAD: 1.4333 - 1.4428 ▼
  • GBP/CAD: 1.6265 - 1.638 ▲
  • AUD/CAD: 0.9218 - 0.9246 ▼
  • USD/CAD: 1.3518 - 1.3565 ▲