- USD / CAD breaks a two-day downtrend as USD attempts a bounce.
- Risk aversion spreads to Europe amid renewed fears surrounding Evergrande in China.
- WTI retreats from seven-year highs and weighs on CAD, supporting the pair’s upward move.
The pair USD / CAD is achieving a good recovery from four-month lows of 1.2289 and points towards 1.2350 in response to a general rally in the US dollar.
The USD is strengthening against its main rivals, rebounding from three-week lows as risk appetite suffers amid resurgence of fears around Evergrande in China after the debt-ridden real estate development giant failed to secure a property sale deal with Hopson Development Holdings.
What’s more, the global energy crisis combined with rising inflationary pressures continues to weaken investor sentiment, supporting the recent corrective decline in the USD.
On the other hand, risk aversion in the market is weighing negatively on WTI higher yielding as it retreats from new seven-week highs of $ 83.71, currently down 0.70% on the day at $ 82.80. The decline in oil prices is weighing on the CAD, a currency linked to commodity prices, helping the recovery in the currency pair.
Despite the rebound, risks remain skewed to the downside for USD / CADas warmer Canadian inflation data raises the expectations for an earlier-than-expected rate hike from the Bank of Canada (BoC). The country’s annual CPI consumer price index rose to 4.4% in September from the expected 4.3%.
USD / CAD technical levels
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