Usdcad clear trend in the short term to the upside
Bulls are for dollars right now and waiting for more liquidity to push the price up.
USD/CAD trades to a fresh weekly high (1.2685) after retracing the decline following the semi-annual testimony with Federal Reserve Chairman Jerome Powell, and the Canadian Dollar may face a larger correction during the first week of March as the rebound in the exchange rate coincides with the recent weakness in global equity prices.
Swings in risk sentiment may continue to sway USD/CAD as the US Dollar still reflects an inverse relationship with investor confidence, but the advance from the February low (1.2468) may turn out to be an exhaustion of the broader trend rather than a change in behavior like the price action seen in 2020.
It seems as though the Federal Open Market Committee (FOMC) is in no rush to alter the path for monetary policy as New York Fed President John Williams insists that “GDP growth this year could be the strongest we've seen in decades,” with the permanent voting-member on the FOMC going into say that “fiscal support, combined with highly favorable financial conditions and steady progress on vaccinations, are all reasons to be optimistic the economy will experience a strong recovery this year.”
Nevertheless, Williams emphasizes that the Fed “will continue to watch and learn and remain committed to using our full range of tools to help assure that the recovery will be as robust as possible,” and the dovish forward guidance may keep key market themes in place as the FOMC stays on track to “increase our holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month.
USD/CAD trades to a fresh weekly high (1.2685) after retracing the decline following the semi-annual testimony with Federal Reserve Chairman Jerome Powell, and the Canadian Dollar may face a larger correction during the first week of March as the rebound in the exchange rate coincides with the recent weakness in global equity prices.
Swings in risk sentiment may continue to sway USD/CAD as the US Dollar still reflects an inverse relationship with investor confidence, but the advance from the February low (1.2468) may turn out to be an exhaustion of the broader trend rather than a change in behavior like the price action seen in 2020.
It seems as though the Federal Open Market Committee (FOMC) is in no rush to alter the path for monetary policy as New York Fed President John Williams insists that “GDP growth this year could be the strongest we've seen in decades,” with the permanent voting-member on the FOMC going into say that “fiscal support, combined with highly favorable financial conditions and steady progress on vaccinations, are all reasons to be optimistic the economy will experience a strong recovery this year.”
Nevertheless, Williams emphasizes that the Fed “will continue to watch and learn and remain committed to using our full range of tools to help assure that the recovery will be as robust as possible,” and the dovish forward guidance may keep key market themes in place as the FOMC stays on track to “increase our holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month.
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