- USD/CAD fades bounce off five-week low, retreats from intraday low of late.
- Oil buyers cheer Russia-Ukraine crisis, OPEC+ inaction to stay firmer around multi-year top.
- Fed’s Powell propels 0.50% rate-hike concerns, adding importance to today's US jobs report for February.
USD/CAD struggles to keep the previous day’s rebound from late-January lows, mildly bid around 1.2700 during Friday’s mid-Asian session.
That being said, the loonie pair dropped around 40 pips initially on the news of the Russian military’s shelling on the Ukrainian nuclear power plant, one of the largest in Europe. The news renewed Chernobyl woes and propelled the market’s rush towards risk-safety, as well as fuel prices of Canada’s key export item WTI crude oil.
However, the latest headlines taming fears of nuclear radiation seemed to have placated the market’s risk-off mood.
Even so, the latest instance confirms the market’s doubt over the Russia-Ukraine peace talks that agreed on the safe passage of Kyiv’s civilians the previous day.
Amid these plays, S&P 500 Futures drop around 1.0% on a day whereas the US 10-year Treasury yields mark near six pips of a downside to 1.78% by the press time. Further, the US Dollar Index (DXY) eases after refreshing the 2022 peak while WTI crude oil also consolidates daily gains near $110.00 after initially rising to $112.81.
While firmer WTI seems to favor USD/CAD bears, recently increasing odds of faster Fed rate hikes keep the pair buyers hopeful.
Fed Chair Jerome Powell reiterated his support for a 0.25% rate hike, actually showed readiness for a 0.50% rate-lift in the March meeting amid rising inflation fears on Thursday. That said, US ISM Services PMI eased for the third consecutive month in its latest release but the second-tier job data and Factory Orders came in positive.
On the other hand, Bank of Canada (BOC) Governor Tiff Macklem showed readiness to discuss Quantitative Tightening (QT) in his latest speech while also supporting gradual rate increases.
Read: BOC’s Macklem: I am confident we will get back to our 2% inflation target
Looking forward, oil prices and headlines from Ukraine may entertain USD/CAD traders ahead of the key US Nonfarm Payrolls (NFP) for February, expected 400K versus 467K prior.
Read: US Nonfarm Payrolls February Preview: Fed policy runs through Kyiv
Technical analysis
21-DMA probes the USD/CAD pair’s latest rebound near 1.2720 but the bears aren’t likely to retake controls until witnessing a daily closing below the 200-DMA level of 1.2575.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.