HFM information and reviews
Octa information and reviews
FXCC information and reviews
FxPro information and reviews
FBS information and reviews
Vantage information and reviews

USD/CAD Peaks at 1.3700, Reaching a High Since March Amidst Falling Oil Prices and a Strong USD

3 October 2023 Written by Stephane Dubois  Senior Market Analyst Stephane Dubois

The USD/CAD currency pair has seen significant momentum recently, marking its third consecutive day of gains on Tuesday. This surge comes after last week's robust recovery from a pivotal 200-day Simple Moving Average (SMA) support hovering around the 1.3400 territory. The pair has now reached its zenith since late March, enticing investors to look for sustained strength beyond the 1.3700 mark before venturing into new positions.

The robust performance of the US Dollar (USD) is noteworthy. It has rocketed to an impressive 10-month pinnacle, backed by the prevalent sentiment that the Federal Reserve (Fed) is poised to maintain its hawkish trajectory.

This stance is further reinforced by the latest string of robust US macroeconomic indicators. Adding more weight to this bullish outlook, Cleveland Fed President Loretta Mester's remarks cemented the market's belief that the US central bank might hold on to elevated interest rates for a prolonged duration. The yield on the pivotal 10-year US government bond has consequently reached a staggering 16-year high. These dynamics, in conjunction with a globally muted risk appetite, are amplifying the appeal of the US Dollar, regarded as a safe-haven currency, thereby propelling the USD/CAD pair.

Contrastingly, the Canadian Dollar (CAD) is grappling with challenges. Rising anticipations hint that the Bank of Canada (BoC) might have capped its interest rate hikes for now. Recent data from Statistics Canada divulged a stagnation in Canada's economic growth for July. Notably, the manufacturing sector witnessed its most substantial contraction in over two years during this period.

This, coupled with a 0.2% GDP shrinkage in June, has amplified speculations about the BoC maintaining the status quo on interest rates, even amidst persistent inflationary pressures. Furthermore, the Loonie, intrinsically tied to commodities, faces headwinds due to declining Crude Oil prices, bolstering the USD/CAD dynamic.

Oil prices have witnessed a pullback from their recent zenith, marking their fourth consecutive day of declines and touching a three-week trough. This downward trajectory is, in part, attributed to investors cashing in on their profits, spurred by apprehensions that rising US interest rates might negatively influence fuel demand. However, indicators of a constricted global supply could provide a buffer against a more substantial decline. In light of the present fundamentals, the environment is skewed in favor of the USD. The recent surge past the 1.3600 threshold further bolsters the case for a continued upward trajectory for the USD/CAD pair.

Share: Tweet this or Share on Facebook


Canadian Dollar Seeks Opportunities for Growth
Canadian Dollar Seeks Opportunities for Growth

The USDCAD pair remains within a sideways range, with the Canadian dollar occasionally showing a tendency to strengthen.

14 Mar 2024

USDCAD Faces Potential Bearish Retracement Amid Technical Indicators
USDCAD Faces Potential Bearish Retracement Amid Technical Indicators

The USDCAD currency pair finds itself in a precarious position as it grapples with key technical levels and indicators that suggest a possible bearish retracement. In this analysis, we delve into the current status of USDCAD...

26 Jan 2024

USD/CAD Retreats to Near 1.3380 as Crude Prices Surge
USD/CAD Retreats to Near 1.3380 as Crude Prices Surge

The USD/CAD currency pair is experiencing a retracement of recent gains during the Asian session on Friday, with prices edging lower to hover around the 1.3380 mark...

12 Jan 2024

USD/CAD Rises to 1.3380 Amid Declining Crude Prices and Mixed US Economic Data
USD/CAD Rises to 1.3380 Amid Declining Crude Prices and Mixed US Economic Data

The USD/CAD currency pair has been on an upward trajectory, reaching around 1.3380 in the European trading session on Monday. This movement is primarily influenced...

8 Jan 2024

USDCAD Signals a Bullish Trend in the Short-Term Amid Mixed Technical Indicators
USDCAD Signals a Bullish Trend in the Short-Term Amid Mixed Technical Indicators

Introduction The USDCAD currency pair has been exhibiting signs of a bullish trend in the short term as it approaches the critical 20-day Simple Moving Average (SMA)...

5 Jan 2024

USD/CAD Rebounds as US Dollar Gains and Oil Prices Weigh on the Canadian Dollar
USD/CAD Rebounds as US Dollar Gains and Oil Prices Weigh on the Canadian Dollar

The USD/CAD pair experienced a notable rebound, approaching the 1.3260 mark in the early New York trading session. This recovery was catalyzed by a resurgence in the US Dollar Index (DXY)...

1 Jan 2024

MultiBank Group information and reviews
MultiBank Group
XM information and reviews
FP Markets information and reviews
FP Markets
FXTM information and reviews
AMarkets information and reviews
BlackBull information and reviews

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.