By Ketki Saxena
Investing.com -- The Canadian dollar weakened against its US counterpart today, with the US dollar rallying broadly following hawkish comments from US Fed Chairman Jerome Powell, who reiterated the need to keep rates higher for longer.
The Canadian dollar meanwhile was pressured by falling crude prices, but gained some strength from a rising trade balance, and hawkish remarks from Bank of Canada Governor Tiff Macklem yesterday at a Senate committee hearing.
The US dollar, and Fed comments that it is premature to be thinking of a pivot US Initial Jobless Claims for the week ending on October 28 were lower than expected, even though the US economy continues to weaken.
The Institute for Supply Management (ISM) showed the Services PMI was below forecasts, while Factory Orders on an MoM were in line with estimates.
The Canadian dollar meanwhile was pressure by sharp declines in crude prices on a stronger dollar, fears the Fed’s tightening would slow economic growth. In China, COVID-19 cases hit their highest level in two and a half months, leading health authorities to stick by its strict containment policy, raising worries of further demand destruction in the world’s top importer of crude.
The Canadian dollar however gained some support from BoC Governor Tiff Mackem’s remarks yesterday before a Senate committee (a typical event after May and October policy announcements). Mr. Macklem noted that the Bank of Canada is not yet drawing to a close - although that time is nearing.
The loonie also gained some support frm domestic Trade Balances for September, a surplus bolstered by crude oil and wheat exports. The surplus rose to C$1.1 billion, below estimates of C$1.2 billion,