The Canadian Dollar (CAD) surrendered some recent gains against the US Dollar (USD) on Thursday, slipping by a quarter of a percent. This reversal was driven by a shift towards safe-haven assets like the USD, prompted by a series of weaker-than-expected economic data releases from the US.
With a quiet Canadian economic calendar this week, the CAD is highly susceptible to broader market sentiment. Bank of Canada (BoC) Governor Tiff Macklem’s participation in a fireside chat on Thursday didn’t offer any new policy insights, leaving traders to focus on the risk-off environment.
Market Drivers: US Data Disappoints, CAD Follows Suit
- A string of underwhelming US economic reports, including higher-than-expected Initial Jobless Claims and a contraction in both headline and core Producer Price Index (PPI), triggered a flight to safety, boosting the USD.
- BoC Governor Macklem’s remarks at the Bank of International Settlements’ Innovation Hub Center in Toronto offered no surprises, leaving CAD traders without new catalysts.
Technical Analysis: CAD Loses Ground but Remains Mixed
The Canadian Dollar displayed a mixed performance on Thursday, declining against the USD but appreciating against the Euro. The USD/CAD pair climbed above 1.3750, propelled by the Greenback’s strength, but remained below the weekly peak near 1.3790.
Buyers are now aiming to reclaim the 1.3800 level, while sellers are attempting to push the pair back down to the 50-day Exponential Moving Average (EMA) at 1.3668. The overall technical picture suggests a struggle for direction in the near term.