Home Forex USD/CAD remains below 1.3500, eyes on Michigan sentiment data

USD/CAD remains below 1.3500, eyes on Michigan sentiment data

by SuperiorInvest


  • USD/CAD margins eased to 1.3490 on improved risk sentiment.
  • U.S. weekly initial jobless claims fell unexpectedly last week.
  • A recovery in oil prices due to geopolitical tensions in the Middle East could support the commodity-linked Loonie.
  • Traders will watch Michigan’s preliminary US consumer sentiment index for fresh impetus.

USD/CAD pair saw a slight loss below the 1.3500 mark during early Asian trading hours on Friday. Improvement in risk sentiment and modest recovery oil prices provide some support for the Canadian dollar (CAD) and weigh on the pair. At press time, USD/CAD is trading at 1.3490, losing 0.03% on the day.

Initial claims for U.S. unemployment insurance totaled 187,000 for the week ended Jan. 13, the lowest level since Sept. 24, 2022. The number beat market expectations of 207,000, according to the Labor Department on Thursday. Meanwhile, Philadelphia Fed The manufacturing survey for January came in at -10.6 versus -12.8 earlier. In response to the data, American dollar The index finds itself above 103.60 as investors expect the Federal Reserve (Fed) to be in no rush to cut interest rates.

In contrast to the recent massive growth in the United States, the Canadian economy is on the verge of entering a recession. Money markets expect the Fed to cut rates as early as March, while the Bank of Canada (BoC) will cut its first rates from April. Meanwhile, a rebound in oil prices amid fears of supply disruptions and geopolitical risk in the Middle East is boosting the commodity-linked Loonie.

Market participants will be watching a preliminary index of consumer sentiment in Michigan and existing home sales due out on Friday. Additionally, FOMC members M. Daly (San Francisco) and M. Barr (Board of Governors) are scheduled to speak later in the day. Traders will find trading opportunities around the USD/CAD pair.

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