Thoughts on CAD strength and DXY's muted reaction
Been watching the $CADUSD today, that move past 0.7200, hitting 0.7208 at the high, felt pretty significant given the context. You'd think with CAD showing that kind of strength, now trading around 0.72071, and the $USDX at 25.58, not far off its day high of 25.58 but really just consolidating after its early pop from 25.51, there'd be more of a ripple effect. It's almost like the DXY is shrugging off CAD's gains, which usually suggests underlying USD demand elsewhere or just a lack of conviction for a sustained break. I'm starting to lean towards the idea that these smaller, localized currency moves are becoming less impactful on the broader dollar index than they used to be, at least intraday. Anyone else seeing this, or am I missing something crucial in the macro picture that explains DXY's resilience?
It's interesting how often DXY seems to absorb CAD moves, especially when broader risk sentiment is a bit mixed. Could be that other crosses are offsetting some of the CAD strength's impact on the dollar index.