By Ketki Saxena
Investing.com -- The Canadian dollar weakened against its US counterpart today as risk-aversion dominated markets, boosting appeal for the safe-haven greenback. After a brief reprieve in risk-off sentiment following expectations of slower hikes from the Fed, investor sentiment was roiled by rate protests in China against its strict Covid-19 policies.
Investor sentiment was also pressured by a slide in shares of megacap Apple (NASDAQ:AAPL) due to ongoing supply issues, and largely disappointing Black Friday footfall for in store retailers that exacerbated worries of consumer spending.
Hawkish comments from Fed polcymakers also pressured sentiment. St. Louis Fed President James Bullard reiterated that rates must reach the low end of the 5%-7% rate range, while Cleveland Fed President Loretta Mester said she does not believe the Fed is close to a pause on tightening.
While boosting appeal for the back, a sharp decline in investor optimism pressured the risk-sensitive loonie. The Canadian dollar was also pressured by a broad-based slide in commodities as worries of an economic slowdown in China were exacerbated by today’s protests.
Crude however managed to eke out a gain by day’s end, as optimism from OPEC+ production cuts outweighed worries of Chinese demand destruction.
On a technical level, analysts Christopher Lewis at Talk Marktets notes that “The US dollar has been all over the place during the course of the training week, as we are shopping around in a 300 point range. With both the United States and Canada releasing jobs figures on Friday, it’s very likely that this market will remain neutral until then. If and when the market can break out of this range between 1.32 on the bottom and 1.35 on the time, it should dictate the next swing for the rest of the year.”