- USD/CAD lacks a firm intraday direction and is influenced by a combination of divergent factors.
- Overnight recovery in oil prices and reduced bets on a further BoC rate cut benefit the CAD.
- USD bulls remain on the sidelines ahead of Fed Chair Jerome Powell’s speech later today.
The USD/CAD pair is struggling to capitalize on its gains recorded over the past two days and is trading in a range, around the 1.4070 area during the Asian session on Wednesday. Spot prices remain close to the weekly high, although the mixed fundamental background warrants some caution before opening new bullish positions.
Crude oil prices consolidate strong gains from the previous day amid expectations that OPEC+ will announce an extension of supply cuts on Thursday. Added to this is Israel’s threat to attack the Lebanese state if its truce with Hezbollah collapses, which lends some support to crude oil. This, along with reducing bets on a further rate cut by the Bank of Canada (BoC) in December, could benefit the commodity-linked CAD and act as a headwind for the USD/CAD pair.
Meanwhile, the US Dollar (USD) continues to struggle to gain significant positive traction as traders appear reluctant to open aggressive bets ahead of Federal Reserve (Fed) Chairman Jerome Powell’s speech. This could further help limit the gains of the USD/CAD pair. However, expectations that the Fed will take a cautious stance on rate cuts amid concerns that Trump’s expansionary policies will boost inflation should act as a tailwind for the dollar.
Traders could also look forward to the release of the US Non-Farm Payrolls (NFP) report on Friday, which should provide further clues on the Fed’s rate cut trajectory and influence short-term USD price dynamics. term. This, in turn, suggests that any significant decline in USD/CAD could be seen as a buying opportunity and remain capped.
economic indicator
Speech by Fed member Powell
Jerome H. Powell assumed office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to complete an unexpired term. On November 2, 2017, President Donald Trump named Powell as the next chairman of the Federal Reserve.
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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.
