- The US dollar is skyrocketing across the board, as stocks decline and performance rises.
- USD / CAD is about to post the best weekly profit in months.
- Next week: meeting of the Canadian CPI and the Federal Reserve.
The pair USD / CAD it continued to rise during the US session and jumped to 1.2163, reaching the strongest level since mid-May. Near the end of the week, it remains near the highs, with solid bullish momentum.
The pair strengthened amid a rally in the US dollar and also driven by technical factors after breaking above 1.2120. Higher crude oil prices (WTI up 0.65%) are not helping the loonie.
The DXY gains 0.55% while trading at 90.55, about to test the June high, after making a rally from 90.00. On the yield side, the 10-year US yield rose from 1.42% to 1.47%; it is still significantly below the level it was before the US inflation figures released on Thursday.
Key data for next week
USD / CAD is poised to post the biggest weekly gain since February ahead of a major week that includes the Federal Reserve meeting. On Wednesday the Fed will announce its decision. Market participants do not expect rate changes and will look to what the central bank says about rising inflation.
In Canada, the forecast economic reports include homes started in May, manufacturing and wholesales for April and most importantly, the CPI for May. “We expect next week’s inflation report to show that the headline rate held firm at 3.4% in May, matching the increase in April. This would mark the strongest consecutive increases in a decade, although the jump is away from an exceptionally low base established a year ago, when activity stopped during the initial wave of COVID, “say analysts at RBC Economics.