USD/CAD loses traction, drops daily lows below 1.2100
- USD/CAD came under renewed bearish pressure in American session.
- Rising crude oil prices provide a boost to CAD.
- US Dollar Index stays relatively quiet above 90.00.
After spending the first half of the day moving sideways around 1.2100, the USD/CAD pair lost its traction and touched its lowest level of the day at 1.2073. As of writing, the pair was down 0.2% on the day at 1.2077.
Rising crude oil prices support CAD
In the absence of high-tier macroeconomic data releases, crude oil prices continue to impact the CAD's valuation. With the barrel of West Texas Intermediate (WTI) rising more than 1% on the day at $66.15, USD/CAD turned south during the American trading hours.
On the other hand, the US Dollar Index is moving sideways in a narrow band around 90.30. Wall Street's main indexes opened in the negative territory on Monday and the risk-averse market environment seems to be helping the USD limit its losses.
Earlier in the day, the data from the US showed that the NY Fed Empire State Manufacturing Index declined to 24.3 in May from 26.3. Nevertheless, market participants showed little to no reaction to this data.
Meanwhile, Federal Reserve's Vice Chairman Richard Clarida said on Monday that the Fed needs to be attuned and attentive to incoming data on inflation to ensure it is transitory. The benchmark 10-year US Treasury bond yield is up nearly 1% on the day after these comments.
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.
