- USD/CAD trades higher after a losing streak ahead of the US data releases.
- Higher Crude price is contributing support for the Canadian Dollar (CAD).
- US inflation is expected to be improved; underpinning the US Dollar (USD).
USD/CAD trades higher around 1.3560 during the European session on Wednesday, attempting to halt a three-day losing streak. The rebound in US Dollar (USD) helps the pair to register gains.
Western Texas Intermediate (WTI), Crude oil price continues to gain ground, trading higher around $88.70 per barrel at the time of writing. The black gold is holding firm near a 10-month high and continuing to receive strong support due to concerns about tightening global supplies.
This tightening supply situation is compounded by deeper supply cuts announced by Saudi Arabia and Russia, the world's two largest oil producers, for the remainder of 2023, which continues to bolster oil prices.
The bullish oil prices are providing strong support to the commodity-linked Canadian Dollar (CAD). Additionally, the recent subdued performance of the US Dollar (USD) acted as a headwind for the USD/CAD pair. These factors collectively contribute to the strength of the Loonie pair.
US Dollar Index (DXY) retraces the losing streak, which assesses the performance of the US Dollar (USD) against a basket of the other major six currencies. Spot price beats higher at around 104.80 due to the improved US treasury yields, coupled with market caution ahead of the inflation data releases from the United States (US).
US Consumer Price Index (CPI) is expected to improve by 0.5% on a monthly basis from the previous reading of a 0.2% rise. Moreover, the Core CPI figure is anticipated to remain steady at 0.2%. The rise in inflation could reinforce the prevailing hawkish sentiment surrounding the US Federal Reserve (Fed).
The inflation figures have the potential to offer a more precise understanding of inflation trends within the US economy, and they can wield considerable influence over market sentiment and trading choices concerning the USD/CAD pair.
The market expects that the Fed will further tighten monetary policy by attempting another 25 basis points hike through the end of the year 2023. Additionally, the Greenback bulls are cheering the likelihood of interest rates to remain higher for an extended period.
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
EUR/USD extends slide below 1.0300, touches new two-year low
EUR/USD stays under bearish pressure and trades at its lowest level since November 2022, below 1.0300 on Thursday. The US Dollar benefits from the risk-averse market atmosphere and the upbeat Jobless Claims data, causing the pair to stretch lower.
GBP/USD slumps to multi-month lows below 1.2400 on broad USD strength
Following an earlier recovery attempt, GBP/USD reversed its direction and declined to its weakest level in nearly eight months below 1.2400. The renewed US Dollar (USD) strength on worsening risk mood weighs on the pair as trading conditions normalize after the New Year break.
Gold benefits from risk aversion, climbs above $2,650
Gold gathers recovery momentum and trades at a two-week-high above $2,650 in the American session on Thursday. The precious metal benefits from the sour market mood and the pullback seen in the US Treasury bond yields.
These 5 altcoins are rallying ahead of $16 billion FTX creditor payout
FTX begins creditor payouts on January 3, in agreement with BitGo and Kraken, per an official announcement. Bonk, Fantom, Jupiter, Raydium and Solana are rallying on Thursday, before FTX repayment begins.
Three Fundamentals: Year-end flows, Jobless Claims and ISM Manufacturing PMI stand out Premium
Money managers may adjust their portfolios ahead of the year-end. Weekly US Jobless Claims serve as the first meaningful release in 2025. The ISM Manufacturing PMI provides an initial indication ahead of Nonfarm Payrolls.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.