USD/CAD climbs to daily highs above 1.3320 amid broad USD strength
- Fed's Rosengren says he does not see a lot of need to take action on policy.
- US Dollar Index advances to daily highs above 98.30.
- WTI gains more than 2% on Monday to limit pair's gains.
After spending a large part of the day moving sideways below the 1.33 mark, the USD/CAD pair turned north on the back of broad USD strength and was last seen trading at 1.3325, adding 0.4% on a daily basis.
Hawkish Fed Commentary Lift USD
During an interview broadcast on Bloomberg Television, Eric Rosengren, President of the Federal Reserve Bank of Boston, argued that lowering the policy rate early could worsen the next downturn. "The lower interest rates are, the more you're encouraging people to take on more debt. And is this the right stage in the cycle for us to encourage people to be taking on more debt?" questioned Rosengren.
Rosengren argued that the goal of the monetary policy was not to get the yield curve right, but to get the inflation and unemployment right and added that just because other countries were weak it did not mean that the US should be easing its policy.
Supported by these hawkish remarks, the US Dollar Index rose to a 17-day high of 98.34 and was last up 0.12% on the day at 98.32.
On the other hand, easing concerns over the demand outlook and heightened geopolitical tensions in the Middle-East following an attack on a Saudi oil facility by Yemen's Houthi forces caused crude oil prices to climb higher on Monday and helped the commodity-sensitive Loonie limit its losses against the USD for the time being. At the moment, the barrel of West Texas Intermediate is adding 2.6% on the day at $56.20.
Technical levels to consider