USD/CAD reaches 1.4213 as a strong US CPI print fuels Fed tightening bets and falling oil prices weigh on the commodity-linked Canadian Dollar.
The pair is up 0.17% to 1.4213, a three-week high, driven by a strong US CPI upside surprise that TD Securities says seals a December Fed hike, with debate on 25 vs 50bps. Falling WTI oil (near $85.35, down ~18% from $104.03) weighs on the energy-exporting Canadian dollar. RSI at 63.9 shows buyers in control but consolidation risk exists.
WTI has fallen almost 18% from recent highs of $104.03 to near $85.35 on hopes of a US-Iran deal, which would loosen supply expectations. This oil price decline is a key driver weakening the energy-exporter Canadian dollar. Continued deal optimism could keep crude under pressure in the near term.
The Dollar Index trades 0.15% higher near 102.37, supported by the strong US CPI upside surprise that TD Securities says makes a December Fed rate hike all but certain, with a possible 50bps 'catch-up' move on the table. Fresh fears of aggressive Fed tightening underpin the Greenback against major currencies.
The USD/CAD pair climbed 0.17% to 1.4213, marking a three-week high as US CPI data solidified expectations for a December Federal Reserve rate hike. Markets are now debating a 25bps versus a 50bps move, while the Canadian Dollar faces additional pressure from a 18% decline in WTI oil prices to $85.35.
Hopes of a US-Iran deal are pulling oil prices down, which hurts Canada as a net energy exporter, while an upside surprise in US CPI has made a December Fed rate hike all but certain, strengthening the US dollar.
The pair trades near 1.4213, the highest in over three weeks, with support at 1.4210 and the 20-day EMA at 1.4085, and no significant technical resistance immediately overhead.
Oil prices have dropped almost 18% to near $85.35 from recent highs of $104.03 due to hopes of a deal between the United States and Iran.
A strong upside surprise in US CPI has made a December Fed rate hike near certain, with the debate shifting to whether the Fed will hike 25 or 50 basis points, supporting the dollar at 102.37.