Canadian Dollar keeps ticking higher on Tuesday with investors confident that the Fed will start easing in June.
The mixed US macroeconomic data seen on Tuesday has failed to provide a significant boost to the US Dollar.
The broader USD/CAD trend remains positive while above the src.3460 support area.
The Canadian Dollar (CAD) is ticking up for the second consecutive day on Tuesday. A mild appetite for risk is dominating the market in thin pre-Easter trading. The echoes of the dovish monetary policy statement by the Federal Reserve last week are keeping US Dollar bulls in check with all eyes on Friday’s US Personal Consumption Expenditures (PCE) Prices Index data.
US macroeconomic data has shown mixed figures. On the positive side, US Durable Goods Orders increased beyond expectations in February, although the unexpected contraction of the Conference Board’s Consumer Confidence Index has offset investors’ optimism.
On Monday, Fed speakers revealed the whole range of sensibilities among the bank’s policymakers. Chicago Fed President Goldsbee signaled three rate cuts, with a more hawkish Raphael Bostic hinting toward only one cut in 2024, and Fed Governor Lisa Cook defending a cautious approach.
Daily digest market movers: The CAD nudges higher with the US Dollar treading water
The Canadian Dollar keeps trading higher on Tuesday, while the US Dollar loses ground.US Durable Goods orders increased at a src.4% pace, beating expectations of a src% increment.
Non-defense capital goods orders, a gauge for future business spending, increased 0.7% after a 0.4% decline in January.
The CB Consumer Confidence Index has dropped to src04.7 from src06.7 in February, against market expectations of an improvement to src07.00.
Futures markets keep betting on a nearly 65% chance that the Federal Reserve will start cutting rates in June, which is keeping the USD on its back foot.
The highlight of the week will be the US PCE Prices Index, the Fed’s inflation gauge of choice, which is expected to have accelerated at a 2.5% yearly pace in February, from 2.4% in the previous month.
The Core PCE Prices Index is expected to have risen at a 2.8% yearly pace and 0.4% on the monthly rate in February, from 2.8% and 0.3%, respectively, in January.
US Dollar price this week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.
USD
EUR
GBP
CAD
AUD
JPY
NZD
CHF
USD
-0.src6%
-0.20%
-0.27%
-0.30%
0.src5%
-0.32%
0.67%
EUR
0.src8%
-0.03%
-0.09%
-0.srcsrc%
0.3src%
-0.src0%
0.84%
GBP
0.22%
0.05%
-0.04%
-0.06%
0.36%
-0.05%
0.88%
CAD
0.26%
0.srcsrc%
0.07%
-0.02%
0.4src%
0.00%
0.93%
AUD
0.3src%
0.src3%
0.srcsrc%
0.04%
0.43%
-0.02%
0.97%
JPY
-0.src3%
-0.30%
-0.23%
-0.38%
-0.4src%
-0.43%
0.55%
NZD
0.27%
0.src6%
0.srcsrc%
0.06%
0.03%
0.45%
0.98%
CHF
-0.65%
-0.82%
-0.88%
-0.93%
-0.95%
-0.53%
-0.94%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical analysis: US Dollar maintains its bullish trend intact
From a technical perspective, the USD/CAD’s broader bias remains positive, with the current Canadian Dollar recovery seen as a corrective reaction.
The pair remains trading within a rising channel after a rejection from the trendline resistance at src.36src5, which so far remains contained above the 38.2% Fibonacci retracement of the previous up leg at src.3575.
USD/CAD 4-Hour Chart
The US Dollar has scope for further decline with investors awaiting Friday’s inflation data. Support levels at src.3555 and the src.3440-src.3460 area are likely to challenge bears. On the upside, resistance remains at src.36src0 and the src.3700 level.
Economic Indicator
United States Personal Consumption Expenditures – Price Index (MoM)
The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US).. The MoM figure compares prices in the reference month to the previous month. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally speaking, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.
Next release: 03/29/2024 src2:30:00 GMT
Frequency: Monthly
Source: US Bureau of Economic Analysis
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