USD/CAD erases early losses, advances toward 1.33 amid risk-off flows
|- US 10-year T-bond yield extends slide, loses more than 4%.
- WTI slumps below $54 handle ahead of API data.
- US Dollar Index stays above 98 supported by upbeat data.
After falling to its lowest level in two weeks at 1.3223 earlier in the day, the USD/CAD pair made a sharp U-turn in the last hour and turned positive on the day. As of writing, the pair was trading at 1.3280, adding 0.2% on a daily basis.
Risk-aversion returns
The risk-on atmosphere during the first half of the day provided a boost to crude oil prices and helped the commodity-related Loonie outperform its rivals. The barrel of West Texas Intermediate gained as much as 1% on the day and touched a high of $54.55 but reversed its direction with the market sentiment turning sour. At the moment, the WTI is trading at $53.90, up only 13 cents.
Although there were no apparent catalysts that seem to have caused a shift in the market mood, the 10-year US Treasury bond yield turned south and is now losing more than 4% on the day to confirm that risk-off flows are taking control of the markets. On the same note, following a positive start to the day, three main indexes of Wall Street are now all flat.
On the other hand, the US Dollar Index, which spent the large part of the day moving sideways below the 98 mark, is now at 98.04, showing that the broad USD strength is supporting the pair's rally.
Today's data from the US revealed that the Conference Board's Consumer Confidence Index in August came in at 135.1 in August and beat analysts' estimate of 129.5, weighing on expectations of the Federal Reserve opting out for an aggressive rate cut in September.
Technical levels to watch for
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