- The US dollar is under pressure amid risk appetite.
- Oil prices correct on Tuesday, after rising sharply on Monday.
- USD/CAD reaffirms bearish bias after brief rebound.
The USD/CAD falls for the third day in a row. After a brief rebound from the 1.2900 area towards 1.3000, the pair resumed its decline and is trading below 1.2930.
During the American session, the USD/CAD is trading at 1.2922 (new daily low) as it continues to move towards the 1.2900 zone, a critical area. The move lower is being driven by US dollar weakness and risk appetite.
DXY is at its lowest level in two weeks at 106.50, down 0.80%. It falls for the third time, moving away from multi-year highs. US yields show no clear direction on Tuesday. The US 10-year yield stands at 2.98% and the 30-year yield at 3.14%. Stocks on Wall Street are up 1% on average. Crude oil prices fall by around 1%, after a sharp rise on Monday. API inventory data will be released on Tuesday.
The combination of a weaker dollar and risk appetite weighs on USD/CAD. Other currencies, such as the Australian dollar and the New Zealand dollar, posted higher gains against the greenback.
Economic data released on Tuesday showed housing starts fell to 1,559,000 in June and building permits fell to 1,685,000. In Canada, the key report of the week is the June CPI due out on Wednesday. The market consensus is that the index will increase by 0.9% (monthly) and that the annual rate will go from 7.7% to 8.4%. “A slight disappointment in the CPI adds to our belief that CAD performance is living on borrowed time,” warn analysts at TD Securities.
Technical levels
Source: Fx Street
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