Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

USD/CAD: Loonie Weakens as Risk-Aversion Dominates, Hawkish Fed Speak Boosts USD

Published 2022-09-29, 02:46 p/m
Updated 2022-09-29, 02:49 p/m
© Reuters.

By Ketki Saxena 

Investing.com -- The Canadian dollar continued to weaken against its US counterpart today as risk aversion dominated markets, pressuring equities and the loonie, and buoying demand for the safe haven greenback.  

The pair appeared little affected by the full docket of generally upbeat economic data from both the US and Canada this morning.  US GDP contracted by 0.6% during the second quarter, in line with expectations. The Canadian economy meanwhile beat expectations for a contraction to eke out a 1% gain in July. 

At 2:45 p.m ET, the USD/CAD pair was trading at C$1.3712 to a US dollar, up 0.79% in the day’s trading, and with the day’s range of 1.3605 - 1.3756. 

The greenback was further boosted by hawkish rhetoric from Fed Policymakers, including Cleveland’s Fed President Loretta Mester who now expects rates to peak around 4.6%, and St. Louis Fed President James Bullard doubling down on the need to take rates higher and for longer. 

FX Street notes “A combination of factors underpins the greenback and remains supportive of the bid tone surrounding the USD/CAD pair. Expectations that the Fed will stick to its aggressive policy tightening path triggers a fresh leg up in the US Treasury bond yields. This, along with the risk-off impulse, benefits the safe-haven buck.” 

The Canadian dollar was further pressured by an intra-day reversal in crude prices, as an OPEC source told Reuters a cut was "likely", while two other OPEC+ sources said key members had spoken about the topic. Russia is also likely to propose that the bloc reduce oil output by about 1 million barrels per day. Plans for output will be announced at OPEC’s next meeting on Oct. 5.  Crude markets also eased with the threat of Hurricane Ian receding. 158,000 bpd of U.S. oil production is expected to resume in coming days. 

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.