- The Canadian Dollar continues to decline as the US Dollar rallies across various currencies.
- The CAD has experienced a depreciation of approximately 1.23% this week, marking its poorest weekly performance in nearly a year.
- The USD/CAD pair maintains a consistent bullish trend, targeting key levels at 1.3770 and 1.3845.
The Canadian Dollar (CAD) is facing its third consecutive day of selling pressure on Friday, poised to register its poorest weekly performance in nearly a year. The US Dollar is advancing, driven by higher US yields, as market sentiment reevaluates the timing and magnitude of the US Federal Reserve’s easing measures.
Despite the Michigan Consumer Sentiment Index falling below expectations, there’s been an uptick in Consumer Inflation Expectations. However, these data releases have not dampened the strength of the US Dollar, which has also been bolstered by the European Central Bank’s dovish stance on monetary policy.
Earlier on Friday, Boston Fed President Susan Collins suggested a delay in the initiation of monetary easing, hinting at September, and indicated the possibility of only two rate cuts in 2024.
Daily digest market movers: USD/CAD remains firm with investors reassessing Fed easing expectations
- The Canadian Dollar continues its downward trajectory and is poised for a 1.25% decline this week, marking its most significant weekly drop since May 2023.
- In the US, the Michigan Consumer Sentiment Index fell to 77.9 in April from 79.4 in March, slightly below the market’s expectation of a 79.0 reading. On the other hand, the University of Michigan Consumer 5-year Inflation Expectations have edged up to 3% from 2.8% in April.
- Although US 10-year yields have retreated from recent highs, they remain above the crucial 4.5% level, reaching their highest point since last November.
- Investors have adjusted their expectations for Federal Reserve easing, reducing the anticipated rate cuts in 2024 from 150 basis points in January to 60 basis points. The first rate cut is now anticipated only in September, which is bolstering the US Dollar.
- Later today, Fed officials Schmid, Bostic, and Daly, known for their hawkish views within the committee, will address the press. Their remarks could further support the USD.
Canadian Dollar price this week
This week, the Canadian Dollar (CAD) exhibited varying percentage changes against major currencies. Notably, it displayed the weakest performance against the US Dollar.
Technical analysis: USD/CAD keeps marching higher, with 1.3770 and 1.3845 in the bulls’ focus
The US Dollar is experiencing robust bullish momentum, affirming its position above the upper boundary of the channel observed over the past two months, indicating no imminent trend reversal.
Supported by a reverse trendline, the US Dollar has initiated another upward surge toward the resistance zone around 1.3770, which was tested on Friday. Although the USD/CAD pair is currently in overbought territory, it has not reached extreme levels. The projected target of the breached channel lies at the mid-November high of 1.3845.
On the downside, potential support levels include 1.3680-1.3660, and further below, at 1.3545.
USD/CAD Daily Chart
