USD/CAD Drops On Higher Crude Oil Prices, Edges Lower To Near 1.3470

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  • USD/CAD appreciates as the Fed reaffirms expectations for three interest rate cuts in 2024.
  • Higher WTI price could have contributed to underpinning the Canadian Dollar.
  • FOMC has projected stronger growth throughout 2024 and 2025 than initially anticipated.

USD/CAD moves downward to near 1.3470 during the Asian session on Thursday, extending its losses for the second successive day. The Canadian Dollar (CAD) likely found support from rising Crude oil prices.

West Texas Intermediate (WTI) crude oil prices edge higher, reaching close to $81.70 by the time of reporting. This increase may have bolstered the CAD, as the United States (US) Energy Information Administration (EIA) announced a second consecutive week of declines in Crude inventories, indicating strong demand in the world's largest oil consumer.

Meanwhile, the Bank of Canada's (BoC) Governing Council is considering potential rate cuts in 2024 should economic conditions align with forecasts. However, internal disagreements persist regarding the timing of such cuts and the risks associated with inflation. Governor Tiff Macklem remains cautious about immediate rate adjustments, citing concerns over underlying inflationary pressures.

At the time of writing, the US Dollar Index (DXY) has declined to approximately 103.20, primarily driven by weaker US Treasury yields. Yields for 2-year and 10-year bond coupons have fallen to 4.58% and 4.25%, respectively. This decrease can be attributed to the US Federal Reserve's (Fed) reaffirmation of expectations for three interest rate cuts this year.

The Federal Reserve maintained its interest rates at 5.5% during Wednesday's policy meeting. Investor sentiment continues to indicate expectations of additional easing measures in 2024, despite the Federal Open Market Committee (FOMC) projecting stronger growth throughout 2024 and 2025 than initially anticipated.

Notably, the FOMC's Dot Plot of interest rate expectations has shown an increase in the long tail end of the curve. Rates are now forecasted to reach approximately 3.1% by the end of 2026, compared to the previous projection of 2.9%.


USD/CAD

OVERVIEW
Today last price 1.3467
Today Daily Change -0.0025
Today Daily Change % -0.19
Today daily open 1.3492

 

TRENDS
Daily SMA20 1.3524
Daily SMA50 1.3492
Daily SMA100 1.3507
Daily SMA200 1.3484

 

LEVELS
Previous Daily High 1.3605
Previous Daily Low 1.3482
Previous Weekly High 1.3552
Previous Weekly Low 1.3459
Previous Monthly High 1.3606
Previous Monthly Low 1.3366
Daily Fibonacci 38.2% 1.3529
Daily Fibonacci 61.8% 1.3558
Daily Pivot Point S1 1.3448
Daily Pivot Point S2 1.3404
Daily Pivot Point S3 1.3325
Daily Pivot Point R1 1.3571
Daily Pivot Point R2 1.3649
Daily Pivot Point R3 1.3694


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Disclosure: Information on this article contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes ...

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