© Reuters.
The US dollar strengthened against the Canadian dollar early today, with the USD/CAD pair extending its weekly gains to hit 1.3710. This movement comes just before the release of Canada's Retail Sales report and amid a recovery in West Texas Intermediate (WTI) crude oil prices, which have risen to $76.50. The increase in oil prices typically supports the Canadian dollar, known as the Loonie, but market fluctuations spurred by delays from OPEC+ have tempered gains.
Bank of Canada Governor Tiff Macklem has suggested that existing policies may be adequate for managing inflation, hinting at a potential pause in interest rate hikes. This stance mirrors that of the Federal Reserve, which has also indicated a possible halt to its aggressive rate increases, boosting risk-on sentiment that could exert downward pressure on the USD/CAD pair.
Meanwhile, the US Dollar Index, which tracks the greenback against a basket of other major currencies, experienced an uptick to 103.80. This rise is supported by a surge in US Treasury yields, with the 10-year yield reaching 4.46% and the 2-year yield climbing to 4.94%. Investors are closely monitoring these developments as well as the anticipated slight downturn in November's S&P Global PMI data for further insights into the health of key sectors within the US economy.
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