The USD/CAD pair climbed above the key level of 1.3588, driven by Bank of Canada Governor Macklem’s dovish remarks and the decline in oil prices due to Tropical Storm Francine. This rally comes amid expectations of more aggressive rate cuts by the BoC as the Canadian economy faces a slowdown and unemployment reaches a seven-year high.
Investors are now looking ahead to the US Consumer Price Index (CPI) data, which could further support the anticipation of a Federal Reserve rate cut at the upcoming September meeting on the 17th and 18th.
USD/CAD Hits Three-Week High Above 200-DMA
The USD/CAD pair reached a three-week high above the 200-day moving average (DMA) of 1.3588, gaining 0.36% after bouncing back from daily lows. This uptrend was influenced by Governor Macklem’s comments and the impact of Tropical Storm Francine on oil prices.
Meanwhile, Wall Street closed with gains, while the US Dollar Index (DXY) showed minimal gains of 0.06%, trading at 101.67.
BoC Governor Macklem’s statements about potential rate cuts and global trade shifts affecting prices, along with the disruption caused by Tropical Storm Francine on oil production, have contributed to the weakening of the Canadian Dollar.
On the technical front, the USD/CAD remains neutral biased, with short-term momentum favoring an upward trend. Key resistance levels to watch for include 1.3618 and 1.3667/75, while support levels are seen at 1.3550 and 1.3500.
Analysis and Impact on Your Finances
The recent surge in the USD/CAD pair is a result of dovish comments from the Bank of Canada and external factors like falling oil prices. This development could have implications for your finances, especially if you are involved in currency trading or have investments tied to the Canadian Dollar.
As the BoC hints at more rate cuts and the US CPI data looms, it’s essential to stay informed about these market dynamics and their potential impact on your financial decisions. Keep an eye on key levels and economic indicators to navigate the changing landscape of the forex market and make informed choices to protect and grow your wealth.