By Ketki Saxena
Investing.com -- The Canadian dollar experienced an uptick against the U.S. dollar on Thursday, continuing its upward trend despite plummeting oil prices and global central banks' - such as the Bank of England – decisions to increase interest rates. The loonie was the sole currency among the Group of Ten (G10) currencies that managed to strengthen against the greenback.
The loonie appears to be supported by investors anticipating the Bank of Canada might maintain or even surpass the pace set by the Federal Reserve when it comes to raising interest rates.
While Fed Chair Jerome Powell emphasized the necessity for further rate hikes during his testimony before Congress' House Financial Services Committee, statements from other members of Federal Open Market Committee (FOMC) seem to contradict this stance, suggesting that there may be a pause in future Fed rate hikes.
This expectation was also reflected in equity markets - which the loonie tends to correlate with - as the Nasdaq and S&P500 eking out a gain, despite the hawkish comments from Powell.
On a technical level for the pair, analysts at FX Street note, "The market is bearish and is headed towards a price imbalance between the current lows and near 1.3050 on the downside. However, a correction could be on the cards in the meanwhile, albeit remaining bearish while on the front side of the bearish trendline"