Canadian Dollar Weakens as Upbeat US Data Boosts USD
The Canadian Dollar (CAD) opened the week lower against a stronger US Dollar. Robust US manufacturing data and softening crude oil prices weigh on the Loonie in a quiet market session due to European holiday closures.
US Economic Data Signals Strength
The US ISM Manufacturing Index unexpectedly expanded for the first time since October 2022, exceeding the 50-point mark. Positive readings in all sub-indices, particularly a sharp rise in the prices component, suggest potential upward pressure on inflation.
Earlier, the Canadian S&P Manufacturing PMI showed little change in March, marking a full year of contraction in the sector. However, the Bank of Canada's Consumer Expectations Survey revealed improved economic confidence, tempered by expectations for continued high inflation.
Technical Outlook: USD/CAD Bullish Bias
USD/CAD resumed its upward trajectory on Monday, fueled by strong US economic data that supports a "soft landing" scenario and undermines market expectations for three rate cuts in 2024.
The pair remains within a slightly bullish channel. Having cleared resistance at 1.3565, buyers could target 1.3615 and the higher end of the channel at 1.3632. Support levels reside at 1.3520 and 1.3470.