USD/CAD extends sideways grind around 1.2550
- USD/CAD is trading in a relatively tight range on Wednesday.
- US Dollar Index stays below following Tuesday's sharp drop.
- Investors await FOMC Chairman Jerome Powell's speech at 1600 GMT.
After climbing above 1.2600, the USD/CAD pair made a sharp U-turn and closed in the negative territory at 1.2530 on Tuesday. With the trading action turning subdued amid a lack of significant fundamental drivers, the pair is staging a technical correction and was last seen posting small daily gains at 1.2550.
Eyes on Fed's Beige Book, Chairman Powell speech
On Tuesday, the greenback came under heavy bearish pressure as US Treasury bond yields continued to push lower following the inflation data and the 30-year Treasury note auction. The benchmark 10-year US T-bond yield lost more than 3% and the US Dollar Index (DXY) touched its lowest level in more than three weeks at 91.66. Currently, the DXY is consolidating its losses a little below 91.80.
Meanwhile, the barrel of West Texas Intermediate (WTI) is rising for the third straight day and gaining more than 1% at $61.10, allowing the commodity-related loonie to limit its losses.
Later in the session, FOMC Chairman Jerome Powell and New York Fed President John Williams will be delivering speeches. Furthermore, the US Federal Reserve its Beige Book at 1800 GMT. Investors will be keeping a close eye commentary surrounding price pressures.
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.
