USD/CAD continues to trade in red near mid-1.3100s on oil rebound
- USD/CAD is falling for the third straight day on Tuesday.
- WTI is rising toward $38 ahead of API data.
- US Dollar Index stays under bearish pressure amid risk flows.
The USD/CAD pair closed the first day of the week modestly lower and struggled to stage a rebound on Tuesday with rising crude oil prices helping the commodity-related loonie stay strong against its peers. As of writing, the pair was down 0.2% on the day at 1.3148.
The risk-on market environment on Tuesday helps crude oil push higher. Ahead of the American Petroleum Institute's Weekly Crude Oil Stock report, the barrel of West Texas Intermediate (WTI) is up 1.7% on the day at $37.85.
Later in the day, Manufacturing Sales for July will be the only data featured in the Canadian economic docket.
DXY retreats below 93.00
On the other hand, the greenback fails to attract investors as a safe-haven on Tuesday and allows USD/CAD to stay in the negative territory. At the moment, the US Dollar Index (DXY) is down 0.26% at 92.82.
The Federal Reserve Bank of New York's Empire State Manufacturing Survey will be released in the early American session but investors are likely to remain focused on the market's risk perception. The S&P 500 futures are up 0.7% on the day and point out to another strong opening in Wall Street's main indexes.
On Wednesday, the inflation report from Canada and the Federal Reserve's Interest Rate Decision and Monetary Policy Statement will be watched closely by the market participants.
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.
