USD/CAD finds support near 1.33 as attention turns to Canadian inflation data
- USD/CAD stays under pressure on Wednesday.
- US Dollar Index returns below the 97 handle.
- Annual CPI in Canada is expected to rise to 1.9% in March.
After spending the Asian session in a tight range near mid-1.33s, the USD/CAD pair lost its traction during the European trading hours and slumped to a daily low of 1.3306 before going into a consolidation phase. As of writing, the pair was down 0.22% on a daily basis at 1.3322.
Since the start of the week, the loonie struggled to stay resilient against the buck amid a lack of disappointing macroeconomic data releases. Yesterday, Statistics Canada reported a contraction in manufacturing sales and earlier in the week the Bank of Canada's Business Outlook Survey showed that the business sentiment deteriorated in the first quarter of the year.
Meanwhile, the fact that the barrel of West Texas Intermediate is trading in the upper half of its weekly range above the $64 mark is making it difficult for the pair to gain traction and post meaningful gains.
Later in the session, the inflation report from Canada will be looked upon for fresh impetus. Markets expect the annual Consumer Price Index to advance to 1.9% in March from 1.5% in April. Although investors are expecting the BoC to stay in the wait-and-see mode regardless of the CPI reading, a higher-than-expected reading could help the CAD outperform its American counterpart in the near-term.
On the other hand, the only data from the U.S. will be the trade balance. Later in the day, the Fed is scheduled to publish its Beige book.
Technical levels to consider
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.
