- USD / CAD cuts some weekly losses amid the general strength of the US dollar.
- Market risk appetite, represented by US equity indices, hurts safe-haven currencies, except for the dollar.
- The loonie falls, despite rising crude prices.
The USD / CAD it is advancing during the American session, up 0.19%, trading at 1.2393 at the time of writing. Optimistic market sentiment surrounds the market represented by US equity indices rising 0.17% to 0.92%.
The Western Texas Intermediate (WTI), the US benchmark for crude oil, which significantly influences the Canadian dollar, is up 0.61%, trading at $ 81.42 and has failed to lift the CAD.
US dollar cuts some weekly losses, rises above 94.00
The US dollar index that tracks the performance of the dollar against a basket of rivals is up 0.03%, currently at 94.01, supported by the yield of the US 10-year Treasury, which increases almost six basis points, standing at 1,574%
On Friday, Bank of Canada Governor Tim Macklem warned that the faster pace of price increases may persist longer than expected and may slow the pace of Canada’s economic recovery as supply chain problems global supply weighs on the national economy. Furthermore, he added that bottlenecks, international shipping shortages and rising oil prices are not diminishing as fast as central banks around the world had hoped.
Turning to macroeconomic data, the Canadian record featured August Wholesale Sales, which rose 0.3%, below the 0.5% estimated by economists. With respect to the US, Retail Sales for September unexpectedly increased 0.7%, better than the 0.2% contraction forecast by analysts, while excluding autos, they expanded 0.8% more than the 0.5% expected.
Additionally, the University of Michigan Consumer Sentiment Index came in at 71.4, down from the 72.8 expected by investors, the second-lowest reading since 2011, as consumers became more concerned about current conditions and the economic outlook.
USD / CAD technical outlook: to fall to 1.22 earlier than expected – Scotiabank
Scotiabank economists expect the USD / CAD to fall to 1.2200 in the following weeks:
“We are still forecasting 1.22 by the end of the year, but we think USD / CAD is at risk of reaching that point in the next few weeks before maybe picking up a bit in December.”
“There is little obvious support for the USD down to the 1.2250 low (76.4% Fibonacci support at 1.2229), but we can see some potential congestion in the 1.2275 / 1.2325 range that may slow down the USD losses.”
“The resistance is 1.2340 / 45 and 1.25”.
Technical levels
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