USD / CAD - Canadian Dollar Bounces Off Resistance| MENAFN.COM

Friday, 02 December 2022 05:49 GMT

USD / CAD - Canadian Dollar Bounces Off Resistance


(MENAFN- Baystreet.ca) USD / CAD - Canadian Dollar Bounces off Resistance















- European equity indexes and S&P 500 futures in retreat
- Opec expected to cut production by 2.0 million barrels/day
- US dollar rebounding from close
USDCAD snapshot: open 1.3587-91, overnight range 1.3506-1.3622, close 1.3510, WTI $86.11, Gold $1706.31
The Canadian rallied hard yesterday, but those gains are rapidly fading in early NY trading.
Global markets were in a“risk-on” mood for the first two days of this week, partly in hopes that central bankers would head warnings from The United Nations Conference on Trade and Development.
UNCTAD warned that raising interest rates in advanced economies could push the global economy into a recession. noting“Under current supply-chain challenges and rising uncertainty, where monetary policy alone cannot safely lower inflation, pragmatism will need to replace ideological conformity in guiding the next policy moves.”
The prospect that the Fed and other central bankers would ease the pace of rate hikes got traction from the RBA monetary policy decision and the US JOLTS job opening data. The RBA only hiked rates by 25 bps instead of the 50-bps expected partly due to the deterioration in the global economic outlook. The JOLTS report showed job openings dropped suggesting the US economy is cooling.
In addition, the US 10-year Treasury yield had dropped from 3.8% to 3.58% fueled a global equity rally which got an added boost after Elon Musk announced plans to follow through on his offer to purchase Twitter.
However, that positive sentiment soured overnight. San Francisco Fed President Daly and Fed Governor Jefferson reiterated the Fed's desire to lower inflation to 2.0%. Ms Daly appeared to dismiss the UNCTAD report saying,“the Fed's mandate is to achieve US price stability and that is what the Fed is focused on.”
The Reserve Bank of New Zealand hiked its Overnight Cash Rate by 0.50% as expected and the statement did not allude to slowing the pace of hikes.
Opec is expected to announce it will cut production (not quotas) by 2.0 million barrels/day effective November 1. The cut is double than what was previously expected, and the risk of lower crude production has underpinned West Texas Intermediate prices.
EURUSD is trading at the bottom of its 0.9900-0.9994 range due to higher energy prices and weak Eurozone and German data highlighted the Eurozone's economic woes.
GBPUSD traded defensively, falling from 1.1495 to 1.1324 due to renewed US dollar strength and ongoing economic growth concerns.
USDJPY rallied from 143.54 to 14455 in tandem with the higher US 10-year Treasury yield which is at 3.70%.
Today's US data includes ADP employment and ISM services.


















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