 |
The Canadian dollar continued to weaken against the US dollar for the fifth straight trading day on a mild risk-averse undertone in the markets.
Although markets have been largely pricing in a “phase one” trade agreement by the end of the year, China reportedly refused to commit to specific farm purchases which likely shaped today’s trading.
Equity markets are slightly down and safe-havens are up, including yen, franc, and gold. Risk currencies are overall under-performing for the session so far.
Fed’s Powell said that the US economy will likely see a sustained expansion on the wings of robust consumer spending, reassuring market expectations that current policy will remain unchanged for the time being.
The latest US budget statement revealed a rise in fiscal spending which reached 4.7% of the country’s GDP, and the Producer Price Index for October came in at 0.4%, slightly above market forecasts of a 0.3% rise.
The USD/CAD pair extended gains on the lower risk appetite and supportive newsflow around the greenback, despite higher oil prices and somewhat narrower US/Canada yield spreads. Bank of Canada Governor Poloz is giving a speech on the “4th industrial revolution” later today, but there will be no press conference.
Technical tools suggest that the recent upturn in the USD/CAD pair is slowing becoming overstretched, with the RSI reaching towards overbought levels. The October highs of 1.3345 could possibly be reached if the underlying risk sentiment remains beneficial for the greenback.
To the downside, the 1.3200 round-number continues to act as a support for the pair. As of 3:00 p.m. London time, the US dollar traded at 1.3260 against the Canadian dollar.
