- USD / CAD recovered above 1.2700 on Thursday as oil prices came under selling pressure.
- The BoC’s Gravelle spoke up and largely clung to the central bank script.
The pair USD / CAD has moved higher on Thursday, gaining about 0.50% on the day to climb back above the 1.2700 level. That marks a 0.9% change from Wednesday’s lows near 1.2600, although the pair is still down around 1.0% for the week, having opened above the 1.2800 level on Monday.
Thursday’s rise means that USD / CAD is back above its 21-day moving average and it is now testing a resistance area around the 1.2710 level (the minimum of December 1). The next resistance level on the upside is around 1.2750. Beyond that level, there is not much to prevent the pair from picking up all of this week’s losses again and returning to last Friday’s highs at 1.2850.
The main driver of the USD / CAD rise on Thursday has been the drop in crude oil prices.. WTI has been falling recently and is now down more than $ 2 on the day and below the $ 71.00 level. Risk appetite has deteriorated widely on Thursday, not especially due to any headlines or news, but probably more due to profit-taking ahead of risk events (such as US inflation on Friday). This is likely the main driver of the oil slide, although concerns about the re-imposition of restrictions by Covid-19 after UK Prime Minister Boris Johnson announced new restrictions for England on Wednesday could be contributing to the jitters. .
On the other hand, he has been very focused on the Bank of Canada in the last two days. The central bank on Wednesday kept interest rates at 0.25% as expected and held out expectations for a first rate hike as early as April 2022.. There was something that both hawks and pigeons seized on in the statement, which was the risk presented by Ómicron, while also pointing to the rising risks of upward inflation.
Lieutenant Governor Toni Gravelle was speaking on Thursday, but largely stuck to the central bank’s script in terms of economic comments and thus did not move CAD. In fact, the latest BoC meeting appears to have not really had any noticeable impact on the currency at all.
USD / CAD technical levels
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