The loonie, being a risk-sensitive commodity currency, tends to sell off in such scenarios, even if the underlying commodity price is rising. 10% The disconnect between the Canadian dollar and oil prices underscores the dominance of global macroeconomic forces in the short term.
Loonie Technical Levels: Key Support and Resistance Zones
The Canadian dollar weakened against the U. 38 despite a sustained rally in crude oil prices to multi-year highs.
Breaking above this zone would signal a shift in momentum and confirm strength in the Canadian dollar. Concurrently, West Texas Intermediate (WTI) jumped past the $95 per barrel mark.
Loonie Technical Levels Key Support: Finding Strength Amid Weakness
However, as long as the interest rate gap persists and the dollar maintains its safe-haven status, the Canadian dollar may continue to struggle to assert itself against the greenback, irrespective of the oil market’s direction. While the BoC has maintained a dovish stance, focusing on internal economic challenges, the Fed is aggressively hiking rates to combat persistent inflation.
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