- USD / CAD is currently flirting with its 21-day moving average at 1.2560.
- The loonie is one of the worst performing G10 currencies in the session, despite decent data.
The USD / CAD It is currently flirting with its 21-day moving average at 1.2560. The loonie has been unable to take full advantage of the weakening U.S. dollar (versus most of its G10 counterparts), so the loon / dollar remains flat on the day. With the DXY now below 93.00, if the selling momentum continues (some intraday USD dips are looking for a move back to test the 92.50 area, where the 200 DMA resides), this should be bearish for the USD / CAD and could result in a pullback towards weekly lows around the 1.2540 area.
Performance of the day
The loonie is battling most of its G10 counterparts on Thursday and is currently at the bottom of the performance chart, despite the fact that crude oil markets are bullish. It is true that price action in crude oil markets has been choppy amid recent news that OPEC + has agreed to gradually increase production starting in May and that the Saudis will gradually bring their 1 million back online. barrels per day in additional voluntary cuts.
In terms of domestic Canadian drivers, February building permit data was better than expected, showing 2.1% month-on-month growth (-1.4% expected) and the Canadian Markit Manufacturing PMI survey for the month of March was decent. , with the general index rising to 58.5 from 54.8 in February. As indicated by price action, strong data has not given any boost to the loonie, and the coin may have been hit by profit-taking in the wake of Wednesday’s outperformance following strong Canadian GDP data for January. .
Separately, some market commentators attribute comments from Bank of Canada Governor Tiff Macklem, who expressed concern about the sustainability of the recent rise in house prices and the accumulation of household debt on Wednesday as a negative factor. for the currency (that is, given the increased risk of household deleveraging and a possible recession at some point in the next few years). But concerns about house prices and the accumulation of debt are more likely to push the BoC to tighten monetary policy conditions to prevent these trends from continuing, which should be positive for the currency.
Technical levels
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