USD/CAD bounces off multi-week lows near 1.3300

The USD/CAD pair picks up some momentum and retests the 1.3330 mark. The pair is trading at 1.3053 at the time of writing post the announcement of the US headline, Core PCE which drifted lower in December.

US Consumer Sentiment comes next on the economic calendar. The USD/CAD now is attempting to gather some upside traction and revisits the 1.3330 territory on Friday, leaving behind at the same time earlier lows in the vicinity of 1.3300, an area last traded back in late November 2022.

The pair is also navigating a narrow range at the end of the week and still remains unable to gather some lasting upside traction following Thursday’s strong pullback to the vicinity of the 1.3300 territory.

The Canadian dollar looks well propped up by crude oil prices and the recent rate hike by the BoC (January 25). BoC matched consensus and raised the policy rate by 25 bps to 4.50%, although it signaled that extra rate hikes are now unlikely in a context of easing inflation and some loss of momentum in the economic activity. The bank, however, is expected to remain “data dependent”.

The pair remained indifferent after US inflation figures showed the headline PCE rose 5.0% in the year to December (from 5.5%) and the Core PCE gained 4.4% over the last twelve months (from 4.7%).

Additional data releases from the US calendar saw Personal Income expand 0.2% MoM in the last month of 2022 and Personal Spending shrank 0.2% vs. the previous months. Later in the session, US Pending Home Sales are due along with the final print of the Michigan Consumer Sentiment for the current month.

Friday has granted financial markets another positive session in prices of the WTI lends extra assistance to the Canadian dollar so far, keeping the pair’s upside potential contained somehow. In addition, spot remains heading for closing the sixth consecutive week with losses, although the 1.3300 territory seems to have emerged as a hard support.