USD/CAD clings to modest gains above 1.32 as WTI extends slide
- WTI loses more than 2% for the second straight day.
- Annual core CPI in US rises to highest level in more than ten years.
- US Dollar Index drops to 98.30 area despite the upbeat data.
After spending a large part of the day moving sideways below the 1.32 handle, the USD/CAD pair gained traction in the second half of the day as the falling crude oil prices made it hard for the Loonie to outperform the USD. As of writing, the pair was up 0.12% on the day at 1.3207.
OPEC fails to help crude oil recover
At today's OPEC+ meeting, producer voiced their commitment to keeping the oil market in balance but didn't announce any additional supply cuts to weigh on crude oil prices. After closing the day nearly 3% lower yesterday, the barrel of West Texas Intermediate extended its slide and was last down 2.25% on the day at $54.70.
On the other hand, the data published by the US Bureau of Labor Statistics today showed that inflation in the US, as measured by the core Consumer Price Index (CPI), rose to its highest level in more than 10 years in August at 2.4% on a yearly basis and provided a boost to the Greenback, which was already capitalizing on the selling pressure surrounding the Euro after the European Central Bank's deposit rate cut and QE announcements.
The US Dollar Index rose to its highest level since September 3 at 9910 in the early trading hours of the American session. However, with the shared currency shaking off the initial pressure and recovering its losses against the USD, the index reversed its direction and slumped to a daily low of 98.30.
Nevertheless, the crude oil's dismal performance seems to be helping the pair stay in the positive territory.
On Friday, retail sales data from the US will be the last significant macroeconomic data release of the week.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
