USD/CAD stays firmer around 1.2700 on USD strength, sluggish oil ahead of Canada CPI
- USD/CAD edges higher after rising the most in a week.
- US dollar jumped across the board following the lowest CPI print since January.
- WTI struggles near six-week top despite price-positive inventories.
- Canada elections, CPI and US second-tier data eyed.
USD/CAD buyers pause 1.2690 amid Wednesday’s Asian session, following the heaviest daily jump in a week.
The US dollar strength dominated over slightly upbeat oil prices to propel the Loonie pair buyers the previous day. However, the pair’s latest inaction could be linked to the cautious mood ahead of Canada’s key Consumer Price Index (CPI) data for August.
The US Dollar Index (DXY) bounced off a one-week low to regain 92.60-65 levels following the US CPI data release for August. With the headline inflation figures easing to the lowest since January on MoM, the greenback jumped on concerns that the Fed hawks have a reason to back the tapering chatters when they meet in the next week.
Also fueling the US dollar’s safe-haven demand were the fears of the coronavirus and Canadian election.
On the contrary, WTI oil remains fail to rise past August 03 levels even as the industry inventories shrank more than expected. That said, the weekly reading of the American Petroleum Institute (API) Crude Oil Stocks dropped below -2.882M prior to -5.437M during the week ended on September 10. While the US dollar strength weighed on the oil prices, energy traders may now await the official inventories from the Energy Information Administration (EIA), prior -1.529M, for fresh impulse.
Amid these plays, US stocks closed lower while the Treasury yields also dropped the most in a month on Tuesday.
Looking forward, USD/CAD traders will pay attention to Canadian politics amid challenges for the current government ahead of the snap elections. Also important will be the oil fundamentals and risk catalysts. Above all, Canada CPI for August, expected 0.1% versus 0.6% MoM prior, coupled with the BOC CPI Core that is likely to ease from 0.6% to 0.2%. Given the Bank of Canada (BOC) policymakers’ latest cautious mood, today’s Canada inflation numbers will be the key.
Sustained trading beyond 200-day EMA, around 1.2605 enables USD/CAD bulls to aim for July tops surrounding 1.2810.
via FXStreet News https://ift.tt/3tYkUTd
September 14, 2021 at 03:36PM