The Loonie pair has been trading between 1.27 the figure and 1.2774 on Tuesday, thrown around within the range on headlines related to the risk of a Russian invasion of Ukraine. Initially, CAD rose against the greenback as fears eased that Russia would invade Ukraine. However, as noted in an article in Asia, USD/CAD traders turn to oil prices for direction, energy markets are in the driving seat.
A pullback in oil prices has damaged the performance of the Canadian Dollar after prices fell off seven-year highs early on Tuesday. In a signal that Russia may be open to a diplomatic solution to avoid heavy economic sanctions it would otherwise suffer if it were to invade its neighbor, markets are relieved and the premium in oil is bleeding out.
The CAD has been benefitting from prospects a rate hike next month, a move that will break the status quo that has been in place at the BoC since October 2018. Consequently, in the anticipation of a more hawkish outlook at the central bank, Canadian government bond yields remain higher across the curve, tracking the move in US Treasuries. The 10-year was up 3.1 basis points at 1.937%, after touching on Friday its highest level in nearly three years at 1.961%.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.