- USD / CAD is posting modest daily losses ahead of the US session.
- The US Dollar Index remains relatively quiet around 92.50.
- Crude oil prices regain traction after Tuesday’s sharp drop.
The pair USD / CAD it gained more than 100 pips on Tuesday and reached its highest level since late April at 1.2495. On Wednesday, the pair appears to have entered a consolidation phase and was last seen shedding 0.2% on the day at 1.2438.
WTI retraces a small part of Tuesday’s decline
The sharp decline in crude oil prices hit the Canadian dollar hard on commodities on Tuesday. A barrel of West Texas Intermediate lost more than 3% amid concerns about OPEC + producers increasing production after failing to reach an agreement on the group’s production strategy. However, WTI made a rally and is currently climbing more than 1% to $ 74.65.
On the other hand, the broad-based USD strength provided additional boost to USD / CAD. The poor performance of the major Wall Street indices caused a negative shift in market sentiment and helped the dollar outperform its rivals as a safe haven. Following Tuesday’s 0.35% gain, the US Dollar Index is moving sideways around 92.50, allowing the market’s valuation of the CAD to have an impact on the pair’s action.
Later that day, the FOMC will release the minutes of its June meeting. Data from the Ivery Purchasing Managers Index will also be included in the Canadian economic agenda.
Technical levels
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