USD/CAD Refreshes Daily Lows of 1.2760 as the Dollar Index (DXY) Loses Strength, and Oil Prices Rise

Updated:

USD/CAD dipped sharply during the Tokyo session, while the Dollar index depreciates in its upward momentum and oil prices increased due to new supply worries. USD/CAD experienced the action of downward forces today (Friday). Following a little change in its direction, the market drew the attention of buyers at 1.2318 price level, then dipped till it gets to 1.2760 price level.

The dollar index experienced a little decline after it recording a nineteen years high of 103.93. Nevertheless, market partakers should not think of this little decline as a total change in direction, because there is possibility that the Feds will increase the interest rate, which will then favour the dollar index.

Oil Price Increase and Interest Rate Doubts, the USD/CAD  and Dollar Index value Actuators

The doubt about the interest rate choice declaration by the Feds, during the coming week, will keep hanging over the Forex Market. Concerning the market agreement, an interest rate increase by 50bps looks very positive but market players will have to pay attention to the order for a decrease of the balance sheet and a plan of restoring the interest rate to an unbiased position.

During this, the oil price is moving upward as new supply worries sets in amidst positive impressions of the European Union placing a ban on oils from Russia. Anticipation of Europe’s ban on Russian oil was strengthened, following Germany’s submission of its position on the banning of oils from Russia. Germany will have gotten other ways of meeting its bountiful energy request by now, because changing to a new supplier will require a big effort. Presently, we can observe that the rising oil prices have supported the Canadian dollar against the US dollar.

We should keep in mind that Canada is the largest oil exporter to the USA.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.