By Ketki Saxena
Investing.com The Canadian dollar weakened against its U.S. counterpart today, as risk sentiment remained uncertain, and bond yields rebounded ahead of a slew of commentary due from Fed speakers this week.
Investors will carefully parse Fed Chair Powell’s speech on Wednesday for insights on the US central bank’s next move as traders raise bets that the Fed is done hiking, and try to guage when rate cuts will begin.
The Canadian dollar was also pressured by Ivey Purchasing Manager Index (PMI) figures, which came in below expectations but remained in growth territory.
Looking ahead for the pair, it will be a relatively quiet week on the data front, although traders will also be closely watching for the Bank of Canada’s Summary of Deliberations this week.
Analysts Monex Canada note that, “In particular, markets will be looking for how the BoC is viewing the continued slowdown in growth conditions, and the prospects for a recession in the Canadian economy.”
“Beyond this, loonie traders will have to look elsewhere for market catalysts, though with continued conflict in the Middle East accompanying news that Saudi Arabia and Russia will extend production cuts, oil prices will be something to continue keeping an eye on.”
On a technical level for the pair, analysts at FX Street write, “The USD/CAD pair is trading back toward 1.3700 after seeing a clean early Monday bounce from the 50-day Simple Moving Average (SMA) currently parked near 1.3630.”
“Near-term support from the 200-day SMA sits near the 1.3500 handle, capping off any extended bull runs in the Loonie."