USD/CAD trims Wednesday’s losses despite USD weakness

- Advertisement -

USD/CAD is gaining 0.82% courtesy of Fed officials on Thursday.

  • US jobless claims continue to decline, while second-quarter GDP fell 0.6% according to estimates.
  • The Fed’s Mester and Bullard estimate that the Federal Funds Rate (FFR) will peak at around 4.5%.
  • Canada’s economy grew by 0.1% mom in July, beating estimates.

The USD/CAD it is moving steadily towards 1.3700 after falling nearly 0.90% on Wednesday, after reaching a two-and-a-half-year high at 1.3833. Sentiment is compounded by continued aggressive rhetoric from the Fed, while US labor market data confirmed that the economy could survive further tightening by central banks.

- Advertisement -

Therefore, USD/CAD is trading at 1.3717, above its opening price, having touched a daily low of 1.3604 at the time of writing.

Earlier in the day, the US Department of Labor reported that jobless claims for the latest week ending September 24 fell by 197,000, below estimates of 215,000, a sign of resilience. of the labor market.

- Advertisement -

Meanwhile, the US Department of Commerce revealed the final reading of GDP for the second quarter, which was -0.6%, as expected. Notably, the government revised GDP data from the fourth quarter of 2016 to the fourth quarter of 2021, which showed that the economy’s recovery from the Covid-19 pandemic was more substantial than initially reported.

Earlier, some Fed officials, led by Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard, made statements.

Loretta Mester stated that she continues to see inflation as the economy’s main problem and commented that she sees no reason to slow down. Additionally, she expects rates to peak at around 4.6%. Later, St. Louis Fed President James Bullard said the Fed would need to keep rates “higher for longer,” adding that real rates in positive territory are an “encouraging sign.” However, he acknowledged the high risks of a recession, while adding that the unemployment rate at 4.5% “would still be healthy for the economy.”

The Dollar Index, a gauge of the dollar’s value against a basket of peers, remained heavy, down 0.35% at 112,317, well below the yearly high of 114,778.

Regardless of the dollar’s momentum, the Canadian economy unexpectedly rose in July, according to data released by Statistics Canada. July GDP grew 0.1% mom, above the 0.1% contraction estimated by analysts. “After a strong first half of the year, momentum appears to be fading as multi-decade inflation and rapidly rising interest rates weigh on the economy,” sources quoted by Reuters said. .

Given the background of the Bank of Canada raising interest rates by 75 basis points in early September, today’s data and high inflation will likely keep the BoC on the pedal to tame inflation.

USD/CAD Key Technical Levels

USD/CAD

Overview
last price today 1.3717
Today I change daily 0.0094
Today’s daily variation in % 0.69
Daily opening today 1.3614
Trends
daily SMA20 1.3293
daily SMA50 1.3061
daily SMA100 1,296
daily SMA200 1.2823
levels
Previous daily high 1.3833
Previous Daily Low 1.3603
Previous Weekly High 1.3613
Previous Weekly Low 1.3227
Previous Monthly High 1.3141
Previous Monthly Low 1.2728
Daily Fibonacci of 38.2% 1.3691
Daily Fibonacci of 61.8% 1.3745
Daily Pivot Point S1 1.3534
Daily Pivot Point S2 1.3453
Daily Pivot Point S3 1.3304
Daily Pivot Point R1 1.3764
Daily Pivot Point R2 1.3914
Daily Pivot Point R3 1.3994

Source: Fx Street

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Related Articles