Firm oil prices keep Dollar afloat
Tuesday 7 February, 2023
Daily Currency UpdateUSD versus CAD clutched onto lower grounds near the 1.3430 mark during early Tuesday trading hours. Even so, the Dollar and Greenback pair holds strong over last 12 trading days as the market awaits speeches from Bank of Canada’s Tiff Macklem, and Federal Reserve’s Jerome Powell. Another reason for the added strength to the USD/CAD pair could possibly be the steady prices of oil, which is a key export item for the Canadian economy. This pair’s recovery could also be a result of the easing fears of the US economic slowdown. Additionally, the positive prints from Canada’s Ivey Purchasing Managers Index for January were noted at 60.1 versus the expected 42.30. This somehow seemed to exert some downside pressure on the USD/CAD price.
Key MoversThe euro fell 0.2% against USD to the 1.07025 level in the earlier trading session of the day, having hit its lowest mark since January 9th. This was followed by European Central Bank’s (ECB) Governing Council member, Joachim Nagel, making some hawkish comments that rate cuts are not on the agenda in the foreseeable future and noted that the ECB rates are not yet restrictive. The pound is down 0.3% against the USD hitting the 1.1982 levels, after tumbling to a one-month low of 1.1974 in the previous session. Markets are weighing on further commentary from central bankers this week following a dovish outcome of the Bank of England’s (BoE) meeting held last week. We continue to expect the BoE to deliver a final rate hike of 25 basis points in March. Oil recovered dramatically from its drop near $72.60, to the $75.00 mark. This increase spurs on growing hopes of an economic recovery in China after dismantling the pandemic controls.
- EUR/CAD: 1.4366 - 1.4452 ▼
- GBP/CAD: 1.6082 - 1.6207 ▼
- AUD/CAD: 0.9229 - 0.9317 ▲
- USD/CAD: 1.3406 - 1.3468 ▲