Dollar eases on Wednesday, stocks consolidate
08 December 2021
The greenback was seen broadly lower against its major counterparts during the London session as the dollar index seems to be topping in the 96.50 region.
Considering the overbought conditions, we might see a decline in the USD value over the following days.
Later today, the Bank of Canada decides about monetary policy, and the primary rate should stay unchanged at 0.25%. However, considering the rising inflation and a hawkish Fed, the central bank will likely hint at rate hikes starting in Q1/Q2 2022.
After the hawkish October surprise, we expect a slightly hawkish tone to this meeting with risks tilted to an even more hawkish shift, with BoC perhaps signaling openness to a Q1 hike,” analysts at Citibank said ahead of the meeting.
The USDCAD pair fell notably this week as sentiment improved and commodity-linked currencies strengthened. It was seen at 1.2650 during the London session, waiting for the BoC decision.
From other news, the WTI oil settled above the 70 USD threshold again, changing the short-term outlook to bullish. Additionally, the MACD indicator is about to send a bullish signal from a deeply negative zone, reinforcing the current bullish momentum.
US equities charged higher yesterday as Omicron fears abated, with the primary indices rising 2-4% and getting closer to their respective all-time highs printed in November. EU bourses also advanced considerably.
In the precious metals space, nothing new is happening. Both gold and silver oscillated at their multi-week lows, unable to accelerate higher.