USD/CAD treads water to extend gains, trades around 1.3600, focus on US data

USD/CAD treads waters to continue its winning streak, trading around 1.3600 during the early trading hours in the European session on Tuesday. The retreating US Treasury yields are contributing support to the downward pressure on the USD/CAD pair. Investors await upcoming data releases from the US and Canada, seeking fresh impetus into the economic prospects of both countries.

As said, these datasets include Jolts Job Openings, Housing Price Index, and Consumer Confidence, all of which are set to be disclosed later in the day. On Canada’s docket, Gross Domestic Product (GDP) is due to be released on Friday.

The support for the hawkish stance made by the US Federal Reserve (Fed) Chairman Jerome Powell is reinforcing the downward pressure on the Canadian Dollar (CAD). Powell advocated for supporting "higher for longer" interest rates. Powell also mentioned that the Fed is prepared to raise interest rates further if necessary and that the next rate hike decision will be data-driven.

The US Dollar Index (DXY), which measures the performance of the Greenback against the six other major currencies, struggles to retrace from the previous day’s losses. Currently, the spot price trades around 104.00. Recent China’s fiscal measures to attract investors back to its struggling equity markets are contributing to an optimistic risk sentiment, which faded the safe-haven appeal of the US Dollar (USD).

However, China’s economic woes put pressure on the price of Crude oil, which weakens the Loonie pair as Canada is one of the largest Oil exporters to the US. Western Texas Intermediate (WTI) trades around $79.80 at the time of writing.