Canadian Dollar retreats from over one-month low vs USD; rallying Oil prices limit losses
The USD/CAD pair attracts some dip-buyers following a modest bearish gap opening on Monday and retakes the 1.3700 mark during the Asian session. Spot prices, for now, seem to have snapped a five day losing streak to levels just below mid-1.3600s, or the lowest since March 13, touched on Friday, though any meaningful upside seems elusive amid mixed cues.
Renewed US-Iran tensions over the Strait of Hormuz trigger a fresh wave of the global risk-aversion trade and assist the safe-haven US Dollar (USD) in building on Friday's goodish rebound from a nearly two-month low. This turns out to be a key factor supporting the USD/CAD pair, though rallying Crude Oil prices underpin the commodity-linked Loonie and could act as a headwind.
Iran said that it is closing the Strait of Hormuz again for commercial vessels and that any ship that approaches it will be targeted. This comes amid an escalation of the US naval blockade of Iranian ports, which Iran views as a breach of the ceasefire and cites as a key reason for calling off the second round of peace talks. The developments fuel global supply concerns and boost crude oil prices.
Furthermore, the USD struggles to capitalize on its early strength and retreats slightly from a one-week top amid diminishing odds for a rate hike by the US Federal Reserve (Fed). This might contribute to capping gains for the USD/CAD pair, making it prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out and placing aggressive bullish bets.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Dow Jones Industrial Average bounces on Iran's latest Hormuz offer
U.S. stocks opened higher and fluctuated, the Japanese yen rebounded more than 1% intraday, 10-year U.S. Treasury yields broke above 5.22% again, and U.S. crude oil once fell nearly 3%.
After the release of U.S. consumer confidence data, the S&P and Nasdaq turned negative, while the Dow is poised to break a three-day losing streak but is set for a fourth consecutive weekly decline. Meta pulled back, falling more than 3% during the session. The U.S. 10-year Treasury yield surpassed 5.22% again, marking a new high for the third day in a row since 2007, while the 30-year yield reached its highest level since 2004. The yen/dollar pair surged 1.2% intraday, as Japanese and U.S. officials successively signaled concerns over the weak yen. Expectations for a diplomatic resolution between the U.S. and Iran are rising, halting crude oil's two-day climb.
US Treasury volatility surges, triggering alarms! BofA’s Hartnett warns of rising deleveraging risks as higher yields become main threat to the market
Bank of America strategist Michael Hartnett warns that the recent sharp rise in volatility in the US bond market is increasing the risk of broader deleveraging in financial markets.
U.S. diesel prices surge 83% this year! Apollo Chief Economist warns: Cost pass-through may make core inflation more stubborn, Federal Reserve can't ignore it
Torsten Slok, Chief Economist at Apollo Global Management, has warned that the inflation threat posed by the surge in U.S. diesel prices to historic highs may be more serious than the Federal Reserve currently realizes.
Crypto prices
More
