The USD/CAD is headed downhill, giving up some impressive gains from the day before. After reaching a high of 1.3460, this pair has dropped back to reality and now sits just below its daily low at the edge of 1.3400 – with bearish traders biding their time for an even bigger dip!
The US dollar has taken a hit – dropping sharply due to a combination of factors. Rising Treasury bond yields and risk-on sentiment in equity markets have weighed down the greenback, which usually serves as its investors’ go-to safe haven currency. All signs point towards an uncertain future for those looking to cash in on the USD/CAD pair!
Oil prices have held strong to the delight of investors, helping elevate the “Loonie” and generally benefitting those trading in USD/CAD. While hopeful sentiment abounds that fuel demand will surge with China’s recovery from COVID-19, fears still linger about a potential global downturn.
This uncertainty stands alongside contrasting monetary policy paths between Canada and America – each key players for what happens next in this dynamic currency pair!
Dollar Drops, Stocks Rise After Powell Dovish Speech and Hawkish RBA
Jerome Powell and other Federal Open Market Committee members have recently expressed their belief that the economy requires higher than expected interest rate hikes to effectively combat inflation. Meanwhile, Canada looks set to be a pioneer in this field, having already increased rates eight times over the last 11 months – with no signs of stopping!
With an interesting backdrop in place, savvy traders may find exciting opportunities lurking around the USD/CAD pair! Whether it’s through US Weekly Initial Jobless Claims data or a shift in risk sentiment – both can influence the dollar.
Not to mention oil prices that could present some short-term trading possibilities. So get ready for unexpected adventures when you dip into this spirited currency pairing!
Read: Powerful Smart Tools To Integrate Into Your Forex Trading Strategies In 2023
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