- USD/CAD rises sharply on lower WTI prices, fueled by data from China showing its economy slowing down.
- The New York Fed’s Empire State Manufacturing Index for August falls to -31.3, driven by deteriorating business conditions.
- USD/CAD could get some clues from Canadian inflation figures, along with the US Federal Reserve Minutes to be released on Wednesday.
USD/CAD has bounced around the 200 day EMA and rallied strongly towards its daily high at 1.2934 due to a risk aversion drive spurred on by weak Chinese economic data coupled with lower oil prices. , as WTI fell 3.50%, below $90 a barrel.
The pair is trading above 1.2894, gaining 0.88% on the day, after opening near its daily lows during the Asian session at 1.2766, but risk aversion and broad US dollar strength bolstered the pair, extending its gains along of the journey.
Earlier in the US session, the New York Fed reported August business conditions, also known as the New York Fed Empire State Index, which fell to -31.3, below estimates, as orders and shipments slowed down.
Meanwhile, WTI fell on news of China’s economic slowdown, which reignited recession fears around the world. Confirmation of the above is that the People’s Bank of China (PBoC) cut its one-year Medium-Term Line of Credit (MLF) by ten basis points, to 2.75%. The PBoC reacted to weaker-than-expected data, with industrial production and retail sales missing forecasts.
data in focus
During the week, the Canadian economic calendar will include data on inflation. While in the United States, the minutes of the Federal Reserve, data on housing in the United States, initial applications for unemployment benefits, the Conference Board’s leading index and the Fed’s speech will be published.
USD/CAD Daily Chart
USD/CAD Technical Levels
Source: Fx Street
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