- USD/CAD holds lower ground while defending the previous day’s reversal from 13-day high.
- US Dollar remains indecisive even as yields retreat, pays little heed to US President Biden’s SOTU amid mixed Fedspeak.
- BoC’s Macklem hints at a pause in rate hikes but failed to impress pair buyers.
- Risk catalysts could entertain Loonie traders ahead of Friday’s key jobs report from Canada.
USD/CAD makes rounds to 1.3400 as bulls and bears jostle during early Wednesday morning in Europe. In doing so, the Loonie pair fails to justify dovish comments from Bank of Canada (BoC) Governor Tiff Macklem, as well as the mildly offered Oil price. Even so, the US Dollar’s failure to rebound enables the quote to remain mildly offered by the press time.
BoC Governor Macklem teases a pause in the rate hike trajectory by asking for time to gauge how households and businesses adapt to higher rates before further moves. The policymaker also said, “Rate hikes have hit homeowners hard.”
On the other hand, Federal Reserve Chairman Jerome Powell said, “Expect 2023 to be a year of significant declines in inflation,” while also adding that if data were to continue to come in stronger than expected, would certainly raise rates more. It’s worth observing that Fed’s Powell showed hesitance in praising the latest jump in the US Nonfarm Payrolls (NFP) during the appearance on Tuesday when asked about the job growth being a likely force behind the Fed’s aggressive rate hikes. The same suggests a pause in the Fed rate after currently priced-in two rate hikes worth 0.25%.
Elsewhere, US President Biden delivered his State of the Union (SOTU) speech in the first joint session of Congress since Republicans took control of the House of Representatives in January. During the SOTU, US President Biden showed readiness to work with them for the betterment of America. The policymaker also pushed for the billionaire minimum tax while trying to show a tough stand on China if the dragon nation undermines the US sovereignty.
Furthermore, WTI crude oil snaps a two-day rebound near $77.50 amid dicey markets and mixed concerns surrounding future energy demand. In doing so, the black gold fails to cheer a surprise draw in the private inventory data per the American Petroleum Institute’s (API) Weekly Crude Oil Stock data.
Against this backdrop, the US Dollar Index (DXY) remains sluggish near 103.30, after reversing from a one-month high the previous day. In doing so, the greenback’s gauge versus the six major currencies traces softer US Treasury bond yields while justifying unimpressive comments from US President Joe Biden and Federal Reserve (Fed) officials.
It’s worth noting that the S&P 500 Futures print mild losses near 4,170 while paring the biggest daily jump in nearly a week whereas the US 10-year Treasury bond yields snap a three-day uptrend while retreating from a one-month high of around 3.68% to 3.65% by the press time.
Moving ahead, a light calendar keeps challenging USD/CAD moves ahead of the key Canada monthly employment report, up for publishing on Friday.
Technical analysis
Multiple failures to provide a daily closing beyond the 50-bar Exponential Moving Average (EMA), around 1.3445 by the press time, directs USD/CAD toward the 200-day EMA support of 1.3265.
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.
