- USD/CAD prints gain for the previous four sessions consecutively.
- US Dollar Index bounces off low and trades above 92.00 on hawkish Fed’s official views.
- The Canadian dollar weighs down by weaker commodity prices.
USD/CAD extends the previous session’s gains in the early Asian session. The pair hovers in a very narrow trade band with a positive outlook.
At the time of writing, USD/CAD is trading at 1.2548, up 0.11% for the day.
The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals stands above 92.20 after testing the lower level of 91.80 in the earlier session. The comments from Fed’s officials added to the attractiveness of the US dollar.
US Federal Reserve Vice Chair Richard Clarida said there was a strong possibility of an interests rate hike in 2023 on the pretext of the surprising pace of economic recovery from the coronavirus pandemic.
In addition to that, San Francisco Federal Reserve President Mary Daly also sounded similar, as she said that the central bank would be in a position for tapering later this year or early next year.
On the other hand, the Canadian dollar was weighed down by the fall in the Crude oil prices amid demand concerns on the rapid spread of the delta variant and surprise build-up in US crude stock.
As for now, traders are waiting for US Initial Jobless Claims, Fed Waller’s Speech, and Canadian Balance of Trade for fresh trading impetus.