USD/CAD slides again below 1.2700 on a mixed market sentiment

• Economy related US political uncertainty weighs on the greenback.
• Western Texas Intermediate is advancing, underpinning the Canadian dollar.
• Federal Reserve economic reading indicator, the Core PCE was unchanged at 3.6%.

The USD/CAD trims gains for the second day in a row, trading at 1.2661. slightly down 0.14% during the day at the time of writing.

The market sentiment is mixed. Worldwide rising inflationary pressures, even though they are “transitory,” start to worry central bankers. Additionally, the slowing recovery of the labor market and debates in the US Senate and the House regarding US President Joe Biden’s economic agenda add pressure on the US dollar.

Major US equity indices are gaining between 0.04% and almost one percent, while the US Dollar Index, which measures the buck’s performance versus a basket of six currencies, is down 0.21%, sitting at 94.05.

Western Texas Intermediate price weighs on the USD/CAD pair

WTI, which influences the Canadian oil export economy, is advancing 0.22%, is trading at $75.11, boosting the Loonie.

Putting this aside, in the Canadian economic docket, the Gross Domestic Product for July contracted 0.1%, better than the 0.2% decrease expected by the market. In contrast, the Markit Manufacturing PMI for September declined two-tenths from August’s report to 57 from 57.2.

On the US front, the favorite Fed’s reading for inflation, the Core Personal Consumption Expenditure Index for August, increased by 3.6% annually basis, as expected. Further, the ISM Manufacturing PMI for September rose to 61.1, better than the 59.6 expected by analysts. Expanded demand for factory goods bolstered the reading. 

Moreover, the University of Michigan Consumer Confidence edged higher to 72.8 more than 71 foreseen. Even though it remained near pandemic lows, Americans are slightly more optimistic about current economic conditions.

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