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The USD/CAD pair dropped 0.15% on Thursday as market players prepare for further hawkish rhetoric by the Fed.
The USD/CAD slides towards new weekly lows in the North American session amidst a positive market mood, spurred by China’s 1 trillion CNY stimulus, aimed to fix the housing and construction crisis. Meanwhile, traders prepare for Fed Chair Jerome Powell’s Jackson Hole speech on Friday.
The USD/CAD hit a daily high of around 1.2975, before diving, towards its daily low, around 1.2895, while crude oil prices edged higher. However, it bounced off the lows, above the 1.2900 psychological figure. At the time of writing, the USD/CAD is trading at 1.2947, down 0.15%.
The USD/CAD slid on broad US dollar weakness. The US Dollar Index, a gauge of the buck’s value vs. a basket of peers, loses 0.18%, down at 108.405, courtesy of market participants moving to the sidelines or profit taking before Powell’s speech. In the meantime, US Treasury bond yields receded from weekly highs, particularly the 10-year T-note rate down one bps, at 3.095%.
Growth in the US, as measured by the Gross Domestic Product (GDP) for the second quarter of 2022, on its second reading, beat expectations. Still, flashes recessionary signs at -0.6%, higher than 0.8% estimates.
At the same time, Initial Jobless Claims for the week ending on August 20 came lower than estimates, at 243K, vs. 253K expected by market analysts. The fall in unemployment claims continued showing a robust labor market, further fueling expectations of a 75 bps Federal Reserve rate hike.
