- USD/CAD gets some offers on Wednesday and recovers some of the overnight losses.
- A further drop in oil prices weakens the Loonie and remains a support for the move.
- Less aggressive Fed rate hike bets weigh on the dollar and could limit the pair’s gains.
- Traders expect US macro data to get some momentum ahead of the FOMC minutes.
The pair USD/CAD attracts some buying near the 1.3360-1.3355 zone and stages a nice bonus from the weekly low hit earlier this Wednesday. The pair hits a fresh daily high near the 1.3425 zone during the early American session and seems to have stopped this week’s corrective slide from near the key psychological level of 1.3500 for now.
The further decline in crude oil prices is undermining the commodity-linked British currency and turns out to be a key factor acting as a tailwind for the USD/CAD pair. The impending capping of Russian oil prices by the Group of Seven (G7) nations, along with concerns that a new outbreak of COVID-19 in China will hamper demand for fuel, weigh on the black liquid. In addition, the Organization for Economic Co-operation and Development (OECD) forecasts a slowdown in global economic expansion next year, adding pressure to crude oil prices.
Elsewhere, the dollar remains depressed for the second day in a row, amid growing acceptance that the Fed will slow the pace of its tightening. In fact, markets are pricing in a higher probability of a relatively minor Fed rate hike of 50 basis points in December. In addition, the stability of the stock markets is considered another factor that weighs on the dollar as a refuge. This, in turn, could limit gains for the USD/CAD pair, as market attention remains focused on the FOMC Meeting Minutes.
In terms of data, the US released initial jobless claims which increased by 24,000 in the week ending November 19 to 240,000, above the market consensus of 225,000. This is the highest reading since August and the second-biggest rise in five months. Durable goods orders in October rose 1% (2.800 million) in October to 277.400 million, data that was better than the expected rise of 0.4%. Without taking defense into account, the rise was 0.8%, while a fall of 0.1% was expected. Without considering transportation, the advance was 0.5%, and a reading without variations was expected.
Technical levels to watch
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
