Canadian Dollar gains despite lower oil prices
USD/CAD loses ground after two days of gains, trading around 1.4110 during Asian hours on Monday. However, downside momentum could be restrained as the US Dollar (USD) may regain ground.
The Canadian Dollar (CAD) gained despite lower oil prices, trading around 1.4110 during Asian hours on Monday. Rising odds of a December Federal Reserve rate hike, driven by strong US labor data, supported the US Dollar (USD) and could restrain downside momentum for the CAD. Investors closely monitored Tuesday's US Consumer Price Index (CPI) report and Friday's Producer Price Index (PPI) for further signals about Fed policy decisions.
Robust US employment figures, with Nonfarm Payrolls increasing by 165,000 in October, added support for the USD and pressured the CAD. Oil prices, Canada's largest export, faced downward pressure after Trump stated that further military strikes on Iran were unlikely. The USD/CAD pair traded above both the 50- and nine-day Exponential Moving Averages, indicating a constructive near-term bias.
The 14-day Relative Strength Index (RSI) at 55.3 remained in neutral-to-positive territory. The Canadian Dollar's key drivers include interest rates set by the Bank of Canada, the price of oil, the health of the economy, inflation, trade balance, and market sentiment.
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