USD/CAD rises to the fresh high since October 01, up 0.11% intraday heading into Tuesday’s European session. The Loonie pair previously cheered firmer US Treasury yields while the latest weakness in Canada’s key export item, namely WTI crude oil, seems to propel the latest run-up.
US 10-year Treasury yields cling to a 1.627% level, a one-week high after reversing the previous week’s loss in a single day on Monday. The reason could be linked to US President Joe Biden’s decision to nominate Jerome Powell for another term as the Federal Reserve (Fed) Chair and Richard Clarida for Vice-Chairman. The US Dollar Index (DXY) tracks bond yields to rise to the fresh high since July 2020, up 0.06% on a day around 96.50 at the latest.
Also favoring the Treasury yields and the DXY are the recently escalating covid woes in the Eurozone and fears of the US-China tussles. Reuters quotes the outgoing German Chancellor Angela Merkel as saying, “We are in a highly dramatic situation. What is in place now is not sufficient,” while also mentioning the latest virus-led local lockdown in Austria.
On the other hand, the US warships again sail in the controversial Taiwan Strait despite Beijing’s warnings, which in turn trigger fears of another round of the Sino-American tussles. The pessimism grows especially after the world’s top two economies failed to offer any major positives during the last week’s virtual meeting to discuss the phase one deal and other key issues.
Elsewhere, WTI crude oil prices drop to $75.66, down 0.75% on a day, as supply crunch issues battle the US push to ease Strategic Petroleum Reserves (SPR).
Although the firmer yields and downbeat oil prices back the USD/CAD buyers, preliminary readings of the November month’s US PMIs and comments from the Bank of Canada (BOC) Deputy Governor Paul Beaudry will be important to watch for fresh impulse. Even if the hawkish hopes from the US data are likely underpinning the Fed rate hike woes and favoring the pair buyers, upbeat comments from the BOC’s Beaudry could probe the upside momentum.
Highs marked during the late September join a three-month-old resistance line, near 1.2775-80, to challenge USD/CAD bulls.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.