By Ketki Saxena
Investing.com -- The Canadian dollar weakened to its lowest point against the U.S. counterpart in nearly two weeks, as the greenback gained across the board, and amidst rising doubts regarding further interest rate hikes next month by the Bank of Canada.
"The market is losing confidence that the Bank of Canada will hike again next month," stated Adam Button, chief currency analyst at ForexLive.
"A July hike is unnecessary," Button noted. "The Bank of Canada is going to see economic weakness developing in Canada."
Money markets now predict a 55% probability of an interest rate increase during The Bank of Canada's upcoming policy decision scheduled for July 12th - compared to a 64% probably prior to the release of yesterday's Canadian CPI data, which showed inflation easing off to its slowest pace within two years.
The loonie gained some support from crude oil prices; with a second consecutive weekly draw from U.S. crude stockpiles coming out larger than expected.
The dollar meanwhile gained across the board, as Federal Reserve Chair Jerome Powell remained hawkish, and refused to dismiss another potential rate hike executed by their central bank during their meeting set for July.
On a technical level for the pair, analysts at FX Street note, "The USD/CAD would shift to neutral bullish if buyers reclaim the February 2 daily low of 1.3260 and extend its gains past 1.3300. Otherwise, any rallies could be used for USD/CAD sellers to reposition and enter at a better price."
"The Relative Strength Index (RSI) points upward but has yet to cross the bullish territory, so the USD/CAD remains exposed to selling pressure. Meanwhile, the three-day Rate of Change (RoC) suggests buyers are entering the market but not as strong as expected"