USD/CAD rebounds above 1.2660 after testing 1.2600 earlier in the day
|- USD/CAD is posting small daily gains above 1.2660.
- US Dollar Index erased majority of daily losses in American session.
- WTI edges lower toward $70 ahead of API inventory data.
The USD/CAD pair came under strong bearish pressure in the early American session and dropped to 1.2600 area before staging a decisive rebound. As of writing, the pair was up 0.13% on a daily basis at 1.2667.
CPI-inspired USD selloff remains short-lived
Earlier in the day, the USD faced sudden selling pressure after the US Bureau of Labor Statistics announced that the Core Consumer Price Index (CPI) declined to 4% on a yearly basis in August from 4.3% in July. Furthermore, the report revealed that the annual CPI edged lower to 5.3% from 5.4% as expected.
Following a sharp decline to 92.32, however, the US Dollar Index (DXY) reversed its direction with the market mood souring after Wall Street's opening bell. Currently, the DXY is posting small daily losses at 92.53 and the S&P 500 Index is down 0.35% at 4,452.
On the other hand, the data from Canada showed that Manufacturing Sales declined by 1.5% in July, compared to analysts' estimate for a decrease of 1%. On Wednesday, August inflation figures will be featured in the Canadian economic docket.
In the meantime, the risk-averse market environment made it difficult for crude oil prices to continue to push higher. Ahead of the American Petroleum Institue's (API) Weekly Crude Oil Stock data, the barrel of West Texas Intermediate (WTI) is down 0.6% at $70.20, not allowing the commodity-related loonie to erase its losses.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.