Canadian Dollar stands firm near two-week high vs weak USD amid bullish oil prices
The USD/CAD pair remains under some selling pressure for the second straight day on Friday, trading around the 1.4175-1.4170 region during the Asian session and close to an over two-week low set the previous day.
The Canadian Dollar (CAD) has held steady near its two-week high versus the weak US Dollar, buoyed by strong oil prices and a hawkish shift in Bank of Canada (BoC) Governor Tiff Macklem's stance. The USD/CAD pair has been under selling pressure for two days, trading around 1.4175-1.4170 in the Asian session and close to a two-week low.
Factors contributing to this include a lack of respite for USD bulls from Fed Chair Kevin Warsh's neutral remarks and declining US bond yields that keep USD bulls on the defensive. Meanwhile, crude oil prices have remained steady near a three-week top, supporting the commodity-linked Loonie and exerting pressure on the USD/CAD pair.
BoC Governor Macklem stated at the IMF and World Bank Group Annual Meetings that it is harder to look through a rise in energy prices for an extended period, which suggests the BoC could consider raising key policy rates rather than cutting them. However, the US-Canada trade tensions and escalating Middle East conflicts may hinder traders from aggressively betting on the Canadian Dollar.
Macroeconomic data releases can influence the CAD's value, with strong economic indicators attracting foreign investment and leading central banks to raise interest rates, strengthening the currency.
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