- USD/USD is consolidating just above 1.3000, not far from 18-month highs at 1.3050.
- A strong US dollar amid recent US inflation data and risk aversion inflows are offsetting higher oil prices.
- The focus is on upcoming comments from BoC’s Tony Gravelle.
The USD/CAD stabilized just below multi-month highs below 1.3000 on Thursday, as a drop in global macro risk appetite coupled with the strong safe-haven performance of the US dollar offered support to the pair. At current levels around 1.3020, the pair trades with gains of around 0.25% on the day and earlier came close to hitting 18+ month highs on Tuesday just above 1.3050.
With US CPI and PPI data for the past two days showing insufficient moderating (as far as the Fed is concerned, anyway) in inflationary pressures, it’s no surprise to see the US dollar rally. perform so well. The data means the Fed is likely to press ahead with its current aggressive tightening plans and with fears of the central bank weighing heavily on global equities, the greenback is also gaining safe-haven support.
A rebound from the previous session’s lows in crude oil prices has failed to revive the Canadian dollar, which looks likely to continue trading on the defensive in the run-up to BoC Deputy Governor Tony Gravelle’s comments at 4:00 p.m. :30 BST. Gravelle could offer more clues about the scope and timing of the BoC’s monetary tightening plans. However, traders should note that the BoC’s hawkish stance has failed to protect the Canadian dollar from US dollar gains in recent weeks and will likely not kick off this Thursday.
Technical levels
Source: Fx Street
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