- USD/CAD moves higher due to the market caution before US data.
- US Treasury Secretary Yellen disagrees with Moody’s decision to cut its outlook on US debt.
- CAD fails to cheer the improved Crude oil prices.
- WTI price strengthened on OPEC’s monthly report, stating market fundamentals remained strong.
USD/CAD bids higher around 1.3810 during the Asian session on Tuesday, extending gains for the second successive session. However, the US Dollar (USD) grapples with challenges as it struggles to halt losses. The Greenback could face headwinds from the volatile US bond yields. However, it seems that market participants adopt a cautious stance before US inflation data, which contributes support to underpinning the USD/CAD pair.
US Treasury Secretary Janet Yellen showed confidence in the resilience of the US economy despite the concerns raised by the credit rating agency “Moody”. She has expressed disagreement with Moody’s decision last week to cut its outlook on US debt. Secretary Yellen also stated at the close of the APEC Finance Ministers’ Meeting in San Francisco, California that the US economy is strong, and the Treasury market is both safe and liquid. Moody’s decision to lower its outlook on the US credit rating to “negative” from “stable” is based on concerns about large fiscal deficits and a decline in debt affordability.
The upcoming US inflation data on Tuesday is indeed a key event for investors, and it’s likely to influence the trajectory of the USD/CAD pair. Federal Reserve (Fed) officials have emphasized that further tightening will depend on the data. If the inflation data comes in line with expectations, it might convince investors to believe that the Fed’s interest rate hikes are completed.
On the other side, the Canadian Dollar (CAD) seems to fail to cheer on the improved Crude oil prices. West Texas Intermediate (WTI) Crude price continues the winning streak, trading higher around 78.50 at the time of writing. OPEC in its monthly report said that market fundamentals remained strong, which reinforces the Crude oil prices. Additionally, the US cracks down on Russian oil exports, which concerns supplies.
Toni Gravelle, as a Deputy Governor of the Bank of Canada (BoC), is set to deliver talking points during a panel discussion titled “Challenges for Financial Stability and Financial Regulation amid Heightened Uncertainty.” This discussion is likely to shed light on the perspectives and insights of the BoC regarding the current economic scenario and challenges in the realm of financial stability and regulation.