Unlike crude oil, the U.S. dollar/Canadian dollar (USD/CAD) currency pair has made a somewhat more decisive move of late. It held above 1.30 handle successfully after several tests and finally broke higher to head towards and above 1.3210, 1.3350 and 1.3385 resistance levels.
Comments from members of the U.S. Federal Reserve have put a rate hike in March back on the table. Lack of details on the Trump administration pro-growth policies had reduced the probability of the central bank raising interest rates but the words from Chair Yellen and other influential members now have the market pricing in an 80% probability of a rate increase on March 15.
Earlier today, the U.S. Dollar Index extended losses against the basket of the major currencies as yesterday’s Fed statement didn’t give clear signal on the timing of its next rate hike. How did this drop affect the technical picture of euro/U.S. dollar (EUR/USD) currency pair, USD/CAD and AUD/USD?
The price of energy surged 8.33% this week. West Texas is trading at $50.75 per barrel in the aftermath of a surprise Organization of the Petroleum Exporting Countries production cut agreement at the group' meeting in Vienna. The shock came for the fact that after working on a similar deal since March of this year, the agreement has faced several public failures when it was only a freeze of production.
Despite crude oil’s massive rally on the back of the OPEC news, the Canadian dollar, which tends to correlate strongly with oil prices, has hardly moved against its major rivals. Indeed, the U.S. dollar/Canadian dollar (USD/CAD) currency pair momentarily turned positive.