- USD / CAD fails to affirm above 1.2100.
- Ahead: US inflation data
The USD / CAD fell back during the European session to 1.2080, just above the year low of 1.2077, reached on Tuesday. The pair keeps pressing against the 1.2075 / 80 support, under pressure.
Since the start of the week, the USD / CAD has failed to make a significant recovery and has been ranging in a range at the lows for almost four years. The divergence in monetary policies adopted by the Bank of Canada (BoC) and the Federal Reserve was seen as a key factor that continued to act as a headwind for the USD / CAD pair.
The BoC cut its weekly asset purchases at the April policy meeting and advanced guidance for the first interest rate hike to the second half of 2022. Apart from this, the underlying bullish tone in oil prices further sustained the Canadian dollar. This, in turn, kept the pair’s recovery attempt this week at bay. On the other hand, the prevailing climate of risk aversion benefited the US dollar, although without triggering a significant USD / CAD rebound.
The Key data on Wednesday will be US inflation. The consumer price index is expected to show a rise of 0.2% in April and 3.6% from a year ago. The data could have an impact on the market, by influencing monetary policy expectations.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
