USDCAD steadies at six-week lows, capped below 1.3300

  • November 11, 2022
  • The dollar dives to fresh six-week lows at 1.3255.
  • The CAD extends gains on higher oil prices and risk appetite.
  • US consumer sentiment deteriorated beyond expectations in November.

The US Dollar has extended losses against its Canadian counterpart on Friday, reaching a fresh six-week low at 1.3255. The pair remains on the defensive after having depreciated nearly 2% over the last two days with upside attempts capped below 1.3300 so far.

The Canadian Dollar rises on risk appetite and higher oil prices

Oil prices appreciated nearly 3% on Friday, with the US benchmark WTI oil struggling to return above the $88.00 mark after bouncing off at $84.00 on Thursday. This has underpinned the Loonie’s advance, as Canada is one of the world’s major crude producers.

On Thursday, the softer-than-expected US inflation data, with the yearly CPI easing to 7.7% in October from 8.2% in September, hammered the Greenback across the board. These figures have added to evidence that price pressures are starting to ease, which has prompted investors to anticipate a Federal Reserve shift towards slower rate hikes.

US Inflation data has boosted appetite for risk, sending US Treasury bonds and the greenback. The USD Index, which measures the value of the Dollar against a basket of currencies has plummeted 3.3% over the last two days to hit levels sub-107.00 for the first time since mid-August.

In a very thin macroeconomic calendar, with the US celebrating Veteran’s Day, the Preliminary Michigan Consumer Sentiment index has deteriorated beyond expectations, weighed by concerns about inflation and higher interest rates.

Technical levels to watch