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As the US dollar hits one-week high at 1.3780 lower oil prices persist and hawkish Fed hopes are undermining the CAD, the USD/CAD pair is rallying to 1.40 before dropping to 1.32. The US dollar remains dominant across the board, with the market pricing in another aggressive rate hike by the Fed.
The US dollar’s recovery from session lows near 1.3700 has managed to reach one-week highs at 1.3780 during Monday’s US session. The pair, however, failed to consolidate above the top of last week’s horizontal range, at 1.3750/60.
Crude prices recorded a significant decline on Monday, which has been weighing on the oil-sensitive Canadian dollar. The US benchmark WTI has dropped to prices near $90.50 after having traded above $93, with Brent oil depreciating nearly 3% on the day to levels below $96.
Last Friday’s US employment report has boosted confidence on the strength of US economy, in the face of a global economic downtrend, which has paved the way for the Central Bank to maintain its hawkish stance.
The Fed’s hawkish announcement in late September and general risk aversion has sent the USD on a broadly stronger trajectory, and the Canadian counterpart depreciated as a result.
