- USD/CAD gains bullish momentum and rises towards 1.3100 on Tuesday.
- The dollar outperforms its rivals after the US CPI data.
- Crude oil prices are trading little changed on the day.
The USD/CAD it has fallen on Tuesday to its lowest level in more than two weeks, near 1.2950, but has reversed its direction at the beginning of the American session. Buoyed by renewed dollar strength, the USD/CAD has risen sharply towards 1.3100 before you start to consolidate your daily earnings. At time of writing, the pair is up 0.65% on the day, trading at 1.3070.
Data released by the US Bureau of Labor Statistics revealed on Tuesday that annual inflation in the US, measured by the CPI consumer price index, fell to 8.3% in August from 8.5% in July. And what is more important, core CPI, which excludes food and energy price volatility, rose to 6.3% from 5.9%, beating market expectations of 6.1%. Following this report, the DXY dollar index erased its weekly losses within minutes and rose above 109.00.
In the meantime, crude oil prices remain relatively calm and allow the valuation of the dollar to drive the action of the pair. A barrel of West Texas Intermediate (WTI) is trading virtually unchanged on the day at $88.15.
Following the release of the US inflation report, the three main Wall Street indices are down between 1.7% and 3%, allowing the dollar to maintain its strength in the second half of the day.
There will be no big impact data releases for the remainder of the day and risk perception could drive the pair’s price action.
USD/CAD technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
