Canadian Dollar Drops As Oil Prices Tumble On Concerns Over Steep Fed Rate Hike
14 Julho 2022 - 06:38AM
RTTF2
The Canadian dollar lost ground against its key counterparts
during the European session on Thursday, as oil prices plunged on
fears over a super-sized rate hike from the Federal Reserve to tame
inflation and risks of a potential recession.
Crude for September delivery fell $1.78 to $97.79 per
barrel.
Expectations for a full-point rate hike from the Fed later this
month have grown following the release of hot U.S. inflation data
for June.
Commodity prices fell amid a high dollar that makes
dollar-denominated assets more expensive for holders of other
currencies.
The Bank of Canada surprised investors on Wednesday by raising
interest rates by 100 basis points to curb inflation.
With central banks around the globe rushing to tighten policy,
investors fear that aggressive moves could fuel a recession.
The loonie dropped to 1.3166 against the greenback, its weakest
level since November 9, 2020. The loonie is likely to challenge
support around the 1.34 region, if it drops again.
The loonie depreciated to 3-day lows of 1.3179 against the euro
and 0.8847 against the aussie, off its early highs of 0.8751 and
1.2964, respectively. The next possible support for the loonie is
seen around 1.35 against the euro and 0.90 against the aussie.
The loonie fell to 105.45 against the yen, after rising to
106.92 at 4:05 am ET, its strongest level since June 9. Next key
support for the loonie is seen around the 102.00 level.
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