- WTI posts daily gains ahead of weekly API data.
- Fed’s Powell opens the door for a rate cut.
- US Dollar Index struggles to gain traction.
The USD/CAD pair came under a renewed selling pressure in the last hours and extended its daily decline to its lowest level in two weeks at 1.3407. As of writing, the pair was trading at 1.3411, losing 0.17% on a daily basis.
Earlier today, while speaking at an event organized by the Chicago Fed, FOMC Chairman Powell dropped the phrase “patient stance” when talking about a possible policy response to heightened risks surrounding the trade dispute other matters. “We will act as appropriate to sustain the expansion, with a strong labour market and inflation near our symmetric 2% objective,” Powell said, which was assessed as him crack open the door for a rate cut.
With the initial reaction, the US Dollar Index slumped to 97 area but was able to recover to 97.20 in the NA session. More importantly, Powell’s remarks helped the market sentiment turn positive and provided a boost to the risk-sensitive loonie and other assets such as stocks and commodities. Ahead of the weekly API report, the barrel of West Texas Intermediate is adding 1% on a daily basis at $53.40.
Meanwhile, the only data from the U.S. today revealed that factory orders contracted by 0.8% in April following March 1.3% but was largely ignored as it was mostly in line with the market expectation for a decline of 0.9%.
There won’t be any macroeconomic data releases in the remainder of the day. On Wednesday, labour productivity data from Canada and the service sector PMI data from the U.S. alongside with the ADP private sector employment figures from the U.S. will be looked upon for fresh impetus.
Technical levels to consider
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