USD/CAD breaks below 1.2700 as Fed’s Chair Powell testifies at the Housing Finance Panel

The USD/CAD is slumping below 1.2700 is trading at 1.2643, down 0.87% during the day at the time of writing. Earlier in the New York session, the pair was trading around in the 1.3730’s, but in the last couple of hours, it dipped below the 1.26500’s as the Federal Reserve Chairman Jerome Powell testifies at the Housing Finance Panel.

The market sentiment is downbeat as September’s and the Q3 are close to an end. Trading flows around the world, and portfolio reshuffling could be influencing the price action in the day. Meanwhile, the US Dollar Index, which measures the greenback’s performance against six rivals, is down 0.16%, sitting at 94.22.

Western Texas Intermediate (WTI) crude oil, trimmers some of Wednesday’s losses, is up around 0.67%, trading at $75.17, boosting the Canadian dollar, which benefits from rising oil prices.

The US dollar is down due to mixed US economic data

In the US economic docket, the Bureau of Labor Statistics (BLS) released the Initial Jobless Claims for the week ending on September 24, which increased by 362K, more than 335K expected. Despite being bad news regarding the labor market, the US Bureau of Economic Analysis (BEA) unveiled the GDP for the second quarter. The report showed that the US economy rose by 6.7%, a tick higher than the 6.6% foreseen by economists, failing to lift the buck.

In the meantime, Federal Reserve Chairman Jerome Powell is testifying at the Housing Finance Panel. He commented that the Fed finds itself in a complicated situation regarding inflation and employment. Further added, the [Fed] is still far away from full employment, while inflation is well above the target, but stills expect it to abate.

On Friday, the Canadian economic docket will feature July's GDP and the Markit Manufacturing PMI. Regarding the US, Personal Consumption Expenditures and Personal Income could provide fresh impetus for USD/CAD traders.

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