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Forex today, February 20, 2023 regarding the rise of the USD CAD currency pair around 1.3500 amid plummeting oil prices and Bank of Canada inflation. USD/CAD took a buy bid to reverse Friday's corrective move from a 1.5-month high, rising about 0.08% intraday near 1.3490 during a five-day uptrend on Monday morning.
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The currency pair's latest gains were attributed to a decline in export prices of Canada's main goods, WTI crude oil and also a risk-off market mood that supported demand for the US dollar. You need to note, however, that holiday activity in Canada and the US is directly limited by prices amid the weak Asian session. WTI crude oil printed a six-day downtrend near $76.50 as the U.S. dollar strengthened and joined the increase in U.S. crude stockpiles supported by growing anxiety about a faster rate hike by the Fed.
Speaking of central banks, the CPI and U.S. retail sales were better-than-expected following earlier upbeat readings of employment and output data that helped Fed policymakers to remain hawkish. On the other hand, BoC officials showed their readiness to pause interest rate hikes by citing negative implications for the economy. Against this backdrop, S&P 500 stocks edged lower even as Wall Street closed with mixed data. It is worth noting that the yield on 10-year US Treasury bonds surged to its highest level since early November and helped DXY print a three-week uptrend. Furthermore, the calendar is light and inactive in the US, and Canada may limit direct movement ahead of the BoC CPI on Tuesday and the FOMC on Wednesday. If Fed policymakers are still hawkish and Canadian inflation numbers are slowing down, then USD/CAD could witness further gains.
Speaking of central banks, the CPI and U.S. retail sales were better-than-expected following earlier upbeat readings of employment and output data that helped Fed policymakers to remain hawkish. On the other hand, BoC officials showed their readiness to pause interest rate hikes by citing negative implications for the economy. Against this backdrop, S&P 500 stocks edged lower even as Wall Street closed with mixed data. It is worth noting that the yield on 10-year US Treasury bonds surged to its highest level since early November and helped DXY print a three-week uptrend. Furthermore, the calendar is light and inactive in the US, and Canada may limit direct movement ahead of the BoC CPI on Tuesday and the FOMC on Wednesday. If Fed policymakers are still hawkish and Canadian inflation numbers are slowing down, then USD/CAD could witness further gains.
Technical Analysis
The daily close is outside the four-month resistance near 1.315 at the time of publication, it is necessary for bulls for USD/CAD to maintain control of the currency pair.
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