USD/CAD extends sideways grind near mid-1.3100s as focus shifts to Jackson Hole summit
- USD/CAD struggles to find direction, stays near 1.3150.
- US Dollar Index posts small daily gains above 93.00.
- FOMC Chairman Powell and BoC Governor Macklem to speak at Jackson Hole Symposium.
After climbing above 1.3200 on Monday, the USD/CAD pair came under pressure and closed the previous to trading days in the negative territory and touched its lowest level since January at 1.3130. Ahead of key events on Thursday, the pair is trading with modest daily gains near 1.3150.
Calm before the storm
At 1310 GMT, FOMC Chairman Jerome Powell will deliver his opening remarks at the Jackson Hole Symposium. Later in the day, Bank of Canada (BoC) Governor Tiff Macklem will be speaking at the same summit at 1515 GMT.
Additionally, the US Bureau of Economic Analysis will release its second estimate of the second-quarter GDP and the US Department of Labor will publish its weekly Initial Jobless Claims data, which is expected to stay around 1 million for the week ending August 22nd. At the moment, the US Dollar Index is up 0.2% on a daily basis at 93.08.
Commenting on the potential impact of Powell's speech on USD/CAD, “USD/CAD is likely to hold to a 1.30-1.35 range into year’s end, though medium-term risks building for a period of sub-1.30 trade," said Westpac analysts. "A Fed shift to average inflation targeting likely to trigger another leg lower in the USD and global prospects continuing to firm.”
Meanwhile, crude oil prices remain on the back foot, making it difficult for the commodity-related loonie to gather strength against its rivals. After rising to its highest level since early March at $43.75, the barrel of West Texas Intermediate (WTI) turned south on Thursday and was last seen losing around 1% on the day near $43.
Technical levels to watch for