- USD/CAD is trading sideways on Wednesday.
- The dollar operates on mixed terrain, in a day with limited routes.
- Market awaiting US inflation data on Thursday.
USD/CAD found sellers around 1.3450 on Wednesday and held below that level, trading sideways above 1.3400.
The modest rally in crude oil prices underpins the loonie, and is seen as a key factor working against the USD/CAD pair. China’s abandonment of its strict zero-COVID policy fuels hopes of a strong recovery in fuel demand and acts as a tailwind for the black liquid. However, fears of a deeper global economic recession could hold back any significant advance in oil prices.
The dollarfor its part, is weighed down by a new fall in US Treasury bond yields, in a context of growing acceptance of the possibility that the Federal Reserve ease your monetary policy. Data released last week in the US indicates that the effect of the Fed’s big rate hikes in 2022 is being felt in the economy. This, in turn, raises bets for minor Fed rate hikes in the future and keeps US bond yields depressed, near multi-week lows.
Aside from this, there is a generally positive tone around the equity markets, which is a negative for the dollar. Traders, however, appear reluctant to make any aggressive bets on the USD/CAD pair, preferring to wait on the sidelines for US consumer inflation figures due for release on Thursday. Meanwhile, US bond yields could boost demand for dollars.
technical levels
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.
