The USD/CAD pair prolonged its sideways consolidative charge motion via the early European session and remained restrained in a vary above mid-1.2000s.
The pair endured with its war to register any significant restoration and languished close to the lowest degree seeing that May 2015 amid the frequent bearish sentiment surrounding the US dollar. The ongoing decline in the US Treasury bond yields stored the USD bulls on the defensive. Apart from this, the underlying bullish sentiment in the monetary markets in addition acted as a headwind for the safe-haven greenback.
Meanwhile, the USD bulls failed to acquire any respite from firming expectations that the Fed ought to taper its emergency stimulus measures amid symptoms of rising inflationary pressure. The market speculations had been in addition fueled via Friday’s encouraging PMI reports, which indicated that the enterprise exercise in the personal quarter accelerated at a record-setting tempo in May and that fee pressures persevered to extend sharply.
On the different hand, some follow-through uptick in crude oil expenditures underpinned the commodity-linked loonie, which remained properly supported by means of a extra hawkish Bank of Canada. It is well worth recalling that the BoC decreased its weekly asset purchases at the April coverage assembly and additionally introduced ahead the coaching for the first pastime charge hike to the 2nd 1/2 of 2022. This similarly collaborated to cap positive factors for the USD/CAD pair.
From a technical perspective, the current fee motion would possibly nonetheless be labeled as a consolidation phase. This, alongside with the USD/CAD pair’s lack of ability to reap any significant traction, suggests that the near-term bearish style may nevertheless be some distance from being over. This, in turn, helps possibilities for a similarly near-term depreciating pass amid absent applicable market-moving financial releases, both from the US or Canada.