USD/CAD traders await key US CPI, testing 1.3400 with bulls in play – by fx_ross USDCAD Currencies DollarIndex
inflation data following a slew of market-impacting economic data last week from the US economy to start the year off.
In the meanwhile, however, the stronger jobs number from Canada that came in data on Friday has put the Bank of Canada back in the hot seat. Analysts at TD Securities explained that ''another hike this month is not likely to resonate much with the CAD given where markets are priced. Instead, there is the chance that this hike - if realized - is perceived as its last given the pressures emerging on household imbalances and housing in general.
As for USDCAD, the analysts at TD Securities ''think 1.35 acts as a broad anchor for now, but we expect a more definitive make-or-break moment for the pair and the CAD, in general, co theTechnically, the analysts said, they note that ''USD/CAD is coiling into a flag formation established from the Oct highs/Aug 2022 lows.'' Strategically, they are biased for CAD to underperform in the first half of this year.
''However, markets focused on the bigger than expected drop in average hourly earnings to 4.6% year over year.'' However, the analysts argued that ''if the labour market remains as tight as it seems, wages are unlikely to fall much further in the coming months.''
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