- USD / CAD is moving within a relatively tight range on Wednesday.
- The DXY US Dollar Index remains positive during the American session.
- WTI is holding on to modest gains after hitting new multi-month highs.
The pair USD / CAD It lost more than 70 pips Tuesday under pressure from widespread USD weakness and rising crude prices. With the dollar regaining its strength on Wednesday, the pair made a modest upward rebound during the European session. At the time of writing, the pair returns initial earnings and it remains virtually unchanged on the day just above the 1.2700 level.
The focus is on Treasury yields
On Tuesday, the DXY US dollar index fell sharply at the end of the US session after the US bond auction caused a sharp drop in yields. The DXY index snapped a four-day winning streak and lost 0.4%. However, cautious market sentiment helped the USD to remain resilient against its rivals. At the time of writing, the DXY index is up 0.23% on the day, trading at 90.30.
The US Bureau of Labor Statistics has released the CPI Consumer Price Index figures for December. Consumer prices Headline CPI rose 0.4% month-on-month in December, while prices excluding food and energy costs, the core CPI, rose to a weak 0.1% compared to the previous month.
Additionally, investors will keep a close eye on the performance of US Treasury yields, which has been the main catalyst for USD price action since the beginning of the year.
Meanwhile, crude oil prices regained traction after Monday’s technical correction and a barrel of West Texas Intermediate WTI reached its highest level since February at $ 53.90 before entering a consolidation phase, helping the Canadian dollar, a currency pegged to commodity prices, to limit its losses.
USD / CAD technical levels