USD/CAD Moves to Yearly Highs; Market Awaits 2nd Testimony from Fed Chair Jerome Powell
Published March 1, 2018
USD/CAD moved to its strongest level of 2018, touching 1.2865 earlier this morning, due to strong posturing from the US Federal Reserve, positive US economic data and weaker oil prices.
Federal Reserve Chair Jerome Powell is due to testify in front of the Senate Banking Committee at 10:00 AM EST this morning; this will be the second appearance for Powell this week after fielding questions from US Congress on Tuesday. The US’s newest Fed chair stoked fears that his team may raise rates faster than expected this year by directly addressing his mandate to prevent the US economy from overheating, leading some economists to forecast four rate hikes from the Fed this year.
Economic data from the US today seemed to support Powell’s hawkish stance; US personal spending and price indices both rose while the number of unemployment claims dropped by a healthy margin, as the American labour market continues to tighten.
Oil prices are under continued pressure as concerns over increased US production weigh on the value of the commodity; increased US oil production, which has largely been led by shale extraction efforts, have pushed US oil production levels to an all-time high of 10.28 million barrels per day.