- USD / CAD saw some selling on Wednesday and trimmed some of the gains overnight.
- Bullish oil prices supported the loonie and put pressure amid renewed USD weakness.
- The Canadian CPI mixed report did not influence or provide any significant boost to the pair.
The pair USD / CAD it remained depressed below 1.2700 during the early North American session and had a rather subdued reaction to the Canadian CPI mixed report.
A combination of factors did not help the USD / CAD pair capitalize on the previous day’s rebound from the US post-CPI swing lows to 1.2600, but put some pressure on Wednesday. An extension of the recent bullish streak in crude oil prices sustained the Canadian dollar pegged to commodities. Apart from this, the renewed selling bias of the US dollar acted as a headwind for the pair.
The US dollar continues to be weighed down by the downsizing of an imminent Fed phase-down announcement at the FOMC’s upcoming monetary policy meeting on September 20-21. The shifting of the likely timing of the Fed’s tapering move was evident by a softer tone around US Treasury yields, which, along with underlying bullish sentiment, undermined demand for the dollar. safe haven.
USD bulls couldn’t get any respite since Wednesday’s release of the stronger-than-expected Empire State Manufacturing Index, which jumped to 34.3 for the current month from 18.3 previously. From Canada, the headline CPI beat expectations and rose 4.1% year-on-year, although it was offset by a slight disappointment in the Bank of Canada’s core CPI figure, with a rate of 3.5% year-on-year.
The US economic agenda on Wednesday also includes the release of industrial production figures and the capacity utilization rate. This, coupled with US bond yields and broader market risk sentiment, could sway the USD. Traders will follow the signs of oil price dynamics to seize some near-term opportunities around the USD / CAD pair.