USD/CAD defends 1.2300 as USD retreats
- USD/CAD consolidates for the previous three sessions consecutively.
- US dollar retreats from the weekly highs over Fed’s officials' mixed response on inflation and interest rates.
- The Canadian dollar gains on the upbeat economic data and higher crude oil prices.
USD/CAD struggles to hold onto the gains in the early European session. The pair fell from the daily high of 1.2487 and touched the lower level at 1.2250 on Tuesday.
At the time of writing, USD/CAD is trading at 1.2313, down 0.08% for the day.
The Canadian dollar rose against the greenback as crude oil prices and improved market sentiment helped the loonie recoil from its lower levels. Crude oil prices, one of Canada’s major exports, traded near 3-year highs near $73.5.
The upbeat economic data also boosted the sentiment surrounding CAD, the Export Development Canada's Trade Confidence Index rose 19%, the highest in the last 20 years. Wholesales Sales advanced by 1.1% MoM in May. The Canadian manufacturing Sales grew 1.0% in May, rebounding from a 2.1% drop in April.
The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals stands lower at 91.75%. The mixed economic data and lack of enthusiasm on the US reflation trade. The Fed’s dovish tone capped any upside momentum in the greenback.
The Weekly Initial Jobless Claims fell to 411K, above the market expectations at 380K. US durable goods rebounded less than expected at 2.3% in May, as compared to the market consensus at 2.8%
On the economic docket, traders await for the US Price Consumption Expenditure Index (PCE) Index, and Personal Income and Spending data to take fresh trading impetus.
USD/CAD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
