- US Data Disappointing Expectations, Next Up: FOMC Minutes and ADP Figures.
- The DXY is positive again, it remains above 96.00.
- USD / CAD remains bearish but again rejected below 1.2700.
The pair USD / CAD It bottomed out at 1.2666 and rallied above 1.2700 as the USD leaps from weak to strong within a few minutes. Higher US yields continue to be a key driver of USD strength. At the same time, higher stock prices limit earnings.
In Canada, economic figures showed that the Industrial Products Price Index rose 0.8% in November, as expected; while the Commodity Price Index unexpectedly falls 1%. A different report showed that Markit’s manufacturing PMI fell in December to 56.5 from 57.2, and down from 57.5 in the market consensus. The numbers had a significant impact on the loonie.
USD / CAD continues to move with a bearish bias, but was again rejected below 1.2700. A rally above 1.2770 should cancel out the negative tone. A near-term consolidation below 1.2680 should expose the recent low.
Analysts at Brown Brother Harriman note that the loonie was the only major currency to make gains against the dollar in 2021, “but we may be in a period of underperformance to start in 2022. For the USD / CAD, a breakout above 1.2835 is necessary to establish a test of the December high near 1.2965 “.
Technical levels
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