USD / CAD consolidates in a range close to one-week highs, above 1.2800

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  • The USD / CAD keeps consolidating in a zone of highs in a week.
  • A rebound in oil prices supported the loonie and helped limit increases.
  • The Fed’s hawkish expectations extended support for the dollar.

The USD / CAD recovered a few pips from the low of the European session and is trading in the zone of highs in one week, above 1.2800. The loonie is among the worst performing in the group of those linked to commodities, in a day of limited routes at the main crossings.

The price of oil trimmed gains in the last hours, taking some strength from the Canadian dollar. At the same time, the firmness of the dollar coupled with a general wariness in the markets ahead of the Federal Reserve meeting, keeps the USD / CAD limited. The cautionary tone has to do with the advance of Ómicron and the expectation of a more hawkish tone from the Fed.

The Fed meeting could keep traders on the sidelines awaiting the FOMC’s monetary policy decision on Wednesday. Before that meeting, the November reading of the US Producer Price Index will be released on Tuesday at 13:30 GMT.

In addition to the data, what happens in the Treasury bond market, with oil prices, and the equity markets will be key to determine the direction of the USD / CAD.

Technical levels

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