The Canadian dollar has tested support and resistance levels in the last 24 hours and has failed to break either. None of the price behaviors had anything to do with domestic influences.
It was all due to a reversal of US rate hike speculation, coupled with a drift to negative risk sentiment.
Yesterday, inflation in the United States was weaker than expected, causing the US dollar to plummet, and then, after a cool rethink, quickly turned around. The Consumer Price Index (CPI) rose only 0.3% m / m in August and the core CPI rose only 0.1%, with expected growth rates of 0.4% and 0.3%, respectively.
USD / CAD was not intact. The price fell to $ 1.2601, then soared to $ 1.2794 by the closing price, and then rose to $ 1.2707 in Asia.
Canada’s inflation rate was announced today. Month-on-month results are expected to settle, but year-on-year inflation is skyrocketing. The Canadian dollar may be up somewhat with higher than expected results, but profits may be limited. Last week, Bank of Canada Governor Tiff McClem said interest rates in Canada are unlikely to rise until late 2024. Inflation today will not change that view.
The direction of the Canadian dollar is determined by a wide range of US dollar sentiment, which is bullish at this time. The dialogue over US stock prices is one thing to watch out for. The September-October period has a history of nasty movements, and soaring and long-term rises in key indices mean they are vulnerable to sharp losses.
Traders are looking at China with concern. The generous actions of Chinese regulators have undermined confidence in China’s stock market and global investment. The recent outbreak of COVID-19 in China and weaker than expected economic data have raised concerns that global growth may be slowing. China’s aggressive rhetoric against Taiwan is another source of anxiety. Russia’s annexation of Crimea proves that the Western government has no power to prevent the invasion of superpowers.
In the UK, the Office for National Statistics reported that inflation rose 1.2% from 2.0% y / y in July to August to 3.2% y / y. This is the largest increase ever recorded. The office also said it wouldn’t last long. GBP / USD rose in the news, but those rises have faded since then.
The US dollar / yen pair plummeted from 110.13 yesterday to 109.20 in New York today due to lower yields on US Treasuries and rising negative risk sentiment.
Data in the United States today includes industrial production, occupancy rates, and the NAHB Home Price Index.
Rahim Madhavji is the president of KnightsbridgeFX.com, a Canadian currency exchange, offering Canadians better rates than banks.
Baystreet.ca-USD / CAD-Canadian dollar under pressure again
http://www.baystreet.ca/articles/forex_trader.aspx?articleid=70334 Baystreet.ca-USD / CAD-Canadian dollar under pressure again