Mon, July 22, 2024

USD/CAD Retreats from 1.3790 Peak

Изменения курсов валют и отчеты о занятости: Ключевые драйверы рынка

Quick Look:

  • The pair trades mid-1.3700s, slightly down from recent highs, influenced by rising crude oil prices boosting CAD.
  • The upcoming US CPI report and FOMC decision will significantly impact market direction and sentiment.

The USD/CAD currency pair is trading in the mid-1.3700s, experiencing a slight retreat from a recent one-month high. Multiple factors have influenced this overnight retracement. At the same time, crude oil remains one of the major dynamic shifters. The recent increase in crude oil prices has strengthened the Canadian dollar (CAD). Thereby consequently exerting downward pressure on the US dollar (USD). Despite this, the reduction in expectations for a Federal Reserve rate cut has supported USD bulls. After that, mitigating deeper losses.

USD/CAD Daily Range: 1.3756 to 1.3778

Traders are now closely watching the upcoming US Consumer Price Index (CPI) report and the Federal Open Market Committee (FOMC) decision, as these events are expected to provide critical directional signals. During the Asian trading session, the USD/CAD edged lower, remaining around the mid-1.3700s, following its highest level since April 19, which was approximately 1.3790. The anticipation of US consumer inflation figures and the outcome of the FOMC meeting is intensifying, with the Federal Reserve’s updated economic projections and dot plot insights expected to play a significant role in shaping market sentiment.

Regarding daily trading data, the USD/CAD opened at 1.3775, fluctuated within an overnight range of 1.3756 to 1.3778, and closed at 1.3760. West Texas Intermediate (WTI) crude oil stood at $77.55 per barrel, while gold was $2306.90 per ounce. Analysts closely monitor these commodity prices because they influence the value of the Canadian dollar, given Canada’s status as a major oil exporter.

Market Sentiment: CAD vs. Broad-Based USD Demand

Market sentiment currently sees the CAD trading defensively due to the broad-based demand for the USD. This demand is driven by divergent outlooks from the Federal Reserve and the Bank of Canada (BoC). While the BoC is in easing mode, the Federal Reserve has adopted a wait-and-see approach, likely delaying any rate cuts. The forthcoming US Fed statement will dampen hopes for a September rate cut. Besides, dot plot predictions are set to impact USD demand significantly.

Global equity markets have shown varied performance, reflecting investor caution and regional economic conditions. The ASX 200 fell by 1.33% in Australia, while Hong Kong’s Hang Seng index declined by 1.04%. Conversely, Japan’s Nikkei 225 index saw a modest rise of 0.25%. In Europe, markets were predominantly negative, with the French CAC 40 down by 1.10%. S&P 500 futures declined by 0.34% in the United States, and the 10-year Treasury yield stood at 4.436%.

EUR/USD Influenced by France’s Debt Rating

The EUR/USD currency pair traded within a range of 1.0740 to 1.0774, influenced by Moody’s warning regarding France’s debt rating and comments from the European Central Bank (ECB) President. Meanwhile, the GBP/USD pair fluctuated between 1.2713 and 1.2750, reacting to UK employment data, which revealed a rise in the jobless rate to 4.4%. This data had a notable impact on the pound’s trading dynamics.

The USD/JPY pair traded within the range of 156.96 to 157.46, with movements closely tied to shifts in the 10-year US Treasury yield. On the other hand, the AUD/USD pair traded between 0.6592 and 0.6613, largely ignoring the negative National Australia Bank (NAB) Business Confidence data despite reopening markets.

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