- USD/CAD holds onto the previous day’s bounce off weekly low amid rising geopolitical fears.
- Russia begins Ukraine invasion, US President Biden promises “further consequences” for Russia.
- WTI crude oil renews an eight-year high as Kyiv is under attack.
- Geopolitics is the key but recently hawkish Fedspeak helps USD to remain firmer, US Q4 GDP eyed.
USD/CAD remains on the front foot, taking the bids to refresh daily tops near 1.2780 as Russia officially invades Ukraine amid early Thursday morning in Europe.
In doing so, the Loonie pair reverses the initial Asian session losses while cheering the firmer US Dollar Index (DXY) moves. However, the pair buyers fail to respect the eight-year high prices of Canada’s main export item, WTI crude oil, up 3.5% near $95.10.
That said, the DXY rallies the most in a month as Ukraine Interior Minister conveys attacks from the cruise and ballistic missiles. Earlier in the day, the North Atlantic Treaty Organization (NATO) confirmed Russia’s military action while CNN marked multiple explosions in Ukrainian cities.
Following that, US President Joe Biden promised “further consequences” for Russia while US Senator Marco Rubio, also the Vice-Chairman of the Select Committee on Intelligence, said that Russian airborne attempts seizing control on Kyiv airport.
It’s worth mentioning that the hawkish comments from San Fransisco Fed President Mary Daly also propel the US dollar amid fears of faster Fed rate hikes. The policymaker cited 'more urgency' on rate hikes in her latest speech.
Looking forward, geopolitical headlines are the key for clear market directions. Also important will be the second reading of the US Q4 GDP, expected 7.0% annualized versus 6.9% prior.
Technical analysis
A clear bounce off the five-week-old rising support line, near 1.2730 at the latest, directs USD/CAD bulls towards a resistance line from January 06, near 1.2785 by the press time.