USD/CAD retraces the recent losses as Crude prices drop, moves above 1.3650
|- USD/CAD receives upward pressure on weaker Crude oil.
- WTI prices fall as investors anticipate an agreement on supply cuts into 2024.
- CAD gained ground on upbeat Canada’s retail Sales on Friday.
- US Dollar struggles despite improved US Treasury yields.
USD/CAD recovers the recent losses registered in the previous session. The USD/CAD pair trades higher near 1.3660 during the Asian session on Monday. The decline in Crude oil prices weighs on the Canadian Dollar (CAD). Western Texas Intermediate (WTI) price continues the losing streak that began on Wednesday, bidding lower around $75.00 per barrel, by the press time.
Crude oil prices are under pressure as investors await the Organization of the Petroleum Exporting Countries and their allies (OPEC+) meeting later this week, anticipating an agreement on supply cuts into 2024. The prices of Crude oil experienced a decline following the decision by OPEC+, to postpone a ministerial meeting to November 30.
However, the Loonie Dollar (CAD) gained bullish momentum in Friday's session, propelled by a better-than-expected Retail Sales report and a broader market recovery in risk sentiment. Canada’s Retail Sales (MoM) for September showed an improvement of 0.6% against the market expectation of a flat 0.0% and the previous reading of 0.1% decline. Retail Sales ex Autos remained consistent at a 0.2% increase as compared to the contraction of 0.2%.
The US Dollar Index (DXY) trades around 103.40, facing challenges in halting losses despite improved US Treasury yields. The US 10-year and 2-year bond yields currently stand at 4.50% and 4.97%, respectively, at the time of the press. The US yields rise on the market speculation of the Fed to consider easing monetary policy in 2024.
Investors will likely observe Canada’s Gross Domestic Product (GDP) and employment data, along with key indicators from the United States (US), which include GDP Annualized for Q3, and Core PCE - Price Index.
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