Buyers of oil cheer Russia-Ukraine crises, OPEC+ inaction to remain firmer around multiyear top
Fed’s Powell pushes for 0.50% rate-hike worries, adding significance to today’s US Jobs Report for February.
USD/CAD fails to maintain its rebound from the late-January lows. Friday’s mid Asian session saw a mild bid of 1.2700.
The loonie pair fell around 40 pips on the news that the Russian military had attacked the Ukrainian nuclear power station, which is one of Europe’s largest. The news reaffirmed Chernobyl woes, and prompted the market’s rush to risk-safety. It also boosted fuel prices for Canada’s main export item WTI crude oil.
The market seemed to be reassured by the recent headlines about easing fears of nuclear radiation.
Despite this, the latest instance confirms that the market is still skeptical about the Russia-Ukraine peace negotiations that reached an agreement on the safe passage for Kyiv’s civilians last day.
S&P 500 Futures fell around 1.0% per day, while the US 10-year Treasury yields dropped to 1.78% at press time. The US Dollar Index (DXY), which has been refreshed at the 2022 peak, eases while WTI crude oil consolidates daily gains of near $110.00 after initially rising from $112.81.
Although USD/CAD bears seem to be favoring USD/CAD bears due to a firmer WTI, recent increases in the odds of faster Fed rates hikes keep pair buyers optimistic.
Jerome Powell, Fed Chair, reiterated his support of a 0.25% rate increase and actually indicated readiness for a rate-lift of 0.50% in March’s meeting. This was despite rising inflation fears on Thursday. Despite the fact that the US ISM Services PMI fell for the third consecutive month, the second-tier data on job creation and Factory Orders were positive.
Tiff Macklem, Governor of Bank of Canada (BOC), expressed willingness to discuss Quantitative Tightening in his most recent speech. He also supported gradual rate increases.
The future may be bright for USD/CAD traders as oil prices and headlines coming out of Ukraine could attract USD/CAD traders before the US Nonfarm Payrolls (NFP), which is expected to reach 400K instead of 467K.
Analyse technique
21-DMA examines USD/CAD’s recent rebound near 1.2720, but the bears won’t be able to retake control until they witness a daily close below the 200 DMA level of 1.2575.
