USD / CAD - Canadian Dollar Consolidates Gains| MENAFN.COM

Sunday, 04 December 2022 12:50 GMT

USD / CAD - Canadian Dollar Consolidates Gains


(MENAFN- Baystreet.ca) USD / CAD - Canadian Dollar Consolidates Gains















- Global stocks rally as the US 10-year Treasury yield slides
- WTI oil jumps 6% in 24 hours
- US dollar trading defensively but above its worst levels
USDCAD snapshot: open 1.3634-38, overnight range 1.3570-1.3651, close 1.3623, WTI $84.21, Gold $1708.28
The Canadian dollar climbed sharply yesterday and continued to rise overnight on the heels of rebounding global equity markets.
Wall Street staged and impressive rally yesterday and closed with S&P 500 index gaining 2.59%. A somewhat disappointing US ISM manufacturing report and a United Nations press release calling for central banks in developed countries to stop raising interest rates sparked the stock market gains
The ISM Manufacturing report was a tad softer than forecast at 50.9 rather than the 52.2 expected. The devil was in the details and the details showed both new orders and employment components dipping into contraction territory. That result gave rise to speculation the Fed would need to slow the pace of rate hikes.
The UN Conference on Trade and Development echoed that sentiment when it issued a press release saying,“Central banks in developed economies to revert course and avoid the temptation to try to bring down prices by relying on ever higher interest rates.”
The news came at a time when the US dollar was at extreme overbought levels which exacerbated the slide.
USDCAD fell below 1.3740 which triggered stop loss selling which occurred again when 1.3660 gave way. The slide continued in Asia with USDCAD touching 1.3570 before rebounding to 1.3660 in early NY trading.
The Canadian dollar may have received an added lift when West Texas Intermediate (WTI) oil prices surged over 6.0% from Monday's low. It was broad US dollar weakness that fueled the gains rather than talk that Opec would announce a production cut.
The cartel is expected to announce a 1 million barrel/day reduction in crude production on Wednesday, which would be effective November 1. It is just noise as the cartel has been procuring about 3-4 million barrels/day below its existing quota.
EURUSD climbed from 0.9807-0.9803 due to widespread US dollar weakness. However, gains are limited due to the poor economic outlook for the Eurozone.
GBPUSD rallied from 1.1283 to 1.1428 before sliding to 1.1335. The bullish GBPUSD sentiment after Chancellor Kwasi Kwarteng reversed his tax rate cut has already faded as ongoing economic woes from the energy crisis and inflation cap gains.
USDJPY traded in a 144.42-144.90 with traders ignoring the latest Japanese inflation data.
AUDUSD rallied to 0.6546 in the wake of a surprise 25 bp rate hike from the RBA. Traders were expecting a 50 bp bump. Prices dropped to 0.6452 in NY when the greenback clawed back some of its earlier losses.
Today's US data includes JOLTS jobless claims and factory orders.

















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