USD/CAD prints a fresh low in the bearish correction as Covid variant risk abates
- USD/CAD falls to fresh daily lows on the positive sentiment in markets.
- The covid-19 variants are now hoped to be less severe than first anticipated.
The commodity complex is bid on the day and oil prices are higher which is a supporting factor for the Canadian dollar. At the time of writing, USD/CAD is down some 0.2% and hovers around 1.128 the figure. The pair fell to a low of 1.2797 from a high of 1.2853 on the day for far.
Risk sentiment is solid as investors are betting that the latest COVID type will not disrupt global development. This in turn has promoted a bid in oil despite regulators' concerns about its spread. In recent news, a trio of studies suggested that Omicron may be less likely to land people in the hospital than Delta. Additionally, antiviral medicines and booster shots are becoming more widely available.
All in all, this is a positive backdrop for the markets and the Santa Claus rally is starting to take shape on wall Street. It is a breath of fresh air for investors that have otherwise been concerned by a combination of virus fears, tighter policy, and a bleak outlook for US fiscal stimulus.
Consequently, US stocks are on pace to close at new record highs, fuelled two more drug makers announcing that their COVID-19 preventives retained protection against the omicron variant. Additionally, US data has shown that personal income and spending rose, with Consumer Sentiment improving and Jobless Claims keeping near recent lows.
The S&P 500 rose 0.7% to 4733 the highs. The Nasdaq Composite advanced 0.9% to 16,339, and the Dow Jones Industrial Average gained 0.65% to print a high of 36,006 with still time to go until the close and last full day of trade in the bonds before Xmas Eve, (the bond market was to close at 2 pm ET ahead of a market holiday Friday, while the stock market was slated to remain open until 4 as usual).
Meanwhile, the 10-year US Treasury yield rose to 2.47%. DXY is around flat on the day but remains under pressure within the sideways channel/daily wedge formation:
DXY daily chart
In news on Thursday, AstraZeneca (ANZ) said its Evusheld preventive antibody retained its neutralizing activity against the omicron variant in clinical trials conducted by Oxford University in the UK and the University of Washington in the US.
US data keeps the bid going on wall Street
As for the data, the US Initial Jobless Claims totalled 205,000 during the week ended Dec. 18, in line with market expectations. Personal Consumption Expenditure Inflation rose 0.6% on a monthly basis in November and 5.7% annually, in line with market forecasts. However, excluding volatile food and energy costs, the measure was up 4.7% year-over-year, the most since 1989 which have helped to keep yield elevated and the US dollar supported.
Meanwhile, personal income rose 0.4% in November versus market expectations for a gain of 0.5%, while spending grew 0.6% in line with estimates. Lastly, the University of Michigan consumer sentiment index was revised up slightly Thursday to a reading of 70.6 for December from the 70.4 preliminary estimates.