USD/CAD extends sideways grind around 1.2580
- USD/CAD is fluctuating in a very tight range on Tuesday.
- Modest recovery seen in crude oil prices helps CAD limit its losses.
- US Dollar Index stays in the positive territory above 93.00.
The USD/CAD pair closed the first day of the week in the positive territory but seems to be having a hard time gathering bullish momentum on Tuesday. As of writing, the pair was virtually unchanged on the day at 1.2578.
Oil selloff pauses on Tuesday
Although the USD continues to outperform its rivals, the modest rebound seen in crude oil prices helps the commodity-sensitive loonie stay resilient against its American counterpart. Ahead of the American Petroleum Institute's Weekly Crude Oil Stock data, the barrel of West Texas Intermediate (WTI) is up 1% on the day at $67.40.
On the other hand, the US Dollar Index (DXY), which touched its highest level in nearly three weeks at 93.10, is staying afloat in the positive territory above 93.00.
The US economic docket will feature the Nonfarm Productivity and the Unit Labor Costs data for the second quarter. Furthermore, Cleveland Fed President Loretta Mester and Chicago Fed President Charles Evans will be delivering speeches. On Monday, hawkish Fed commentary provided a boost to the greenback and a similar market reaction could be witnessed in case policymakers voice their support for asset tapering before the end of the year.
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.
