USD/CAD continues to trade sideways below 1.2150 after US data
- USD/CAD struggles to find direction following Wednesday's rebound.
- US Dollar Index stays flat below 91.00 after mid-tier data releases.
- WTI trades deep in the red below $65 on Thursday.
The USD/CAD pair rose to a daily high of 1.2157 on Thursday but struggled to preserve its bullish momentum. As of writing, the pair was trading at 1.2130, where it was virtually unchanged on a daily basis.
The broad-based USD strength on the back of strong Consumer Price Index data allowed USD/CAD to stage a rebound on Wednesday. Wİth the benchmark 10-year US Treasury bond yield rising more than 4% on the back of heightened inflation, the US Dollar Index rose nearly 0.7%.
Investors pay little to no attention to latest US data
On Thursday, the US Bureau of Labor Statistics reported that the annual Producer Price Index (PPI) jumped to 6.2% in April from 4.2% in March. This reading came in higher than the market expectation of 5.9% but failed to trigger a meaningful market reaction. Additionally, the weekly Initial Jobless Claims declined to 473,000 from 507,000. After these data releases, the DXY stays flat on the day near 90.70.
On the other hand, the barrel of West Texas Intermediate is losing 2% at $64.30 on Thursday, making it difficult for the commodity-sensitive CAD to attract investors.
In the meantime, the S&P 500 Futures, which spent a large portion of the day in the negative territory, is currently up 0.3%, suggesting that the USD could struggle to find demand if the market mood improves after the opening bell.
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.
