Anna 
The Canadian Dollar encountered a challenging start against the US Dollar, influenced by the downward pull of crude prices, a factor closely linked to the commodity-driven loonie.
Throughout a day marked by fluctuating market trends, the loonie experienced notable pressure against several major currencies. However, it managed to sustain relative stability against the US Dollar as the trading day drew to a close.
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The US Dollar exhibited softness across various currencies, with declining US Treasury yields and preluding key Consumer Price Index (CPI) data contributing to a reassessment of expectations for interest rate cuts by the US Federal Reserve.
Presently, market indicators suggest the pricing in of five Fed rate cuts in 2024. While a hold is anticipated in January, investors foresee potential cuts in March and May.
Looking ahead for the USDCAD pair, analysts at Scotiabank (TSX:BNS) highlighted, “The weekly chart shows a bullish ‘hammer’ candle developed through the turn of the year.”
The USD’s high close last week, despite substantial intraday fluctuations on Friday, underscores the bullish trade pattern and bolsters the outlook for additional corrective gains in the USD over the next few weeks towards 1.34/1.35.
“Further gains beyond high/low resistance at 1.3390/1.3400 will contribute to near-term bullish momentum.”
