- Both ISM and Markit Manufacturing PMIs come in better than expected in June.
- WTI peaks above $60, retraces small portion of daily gains.
- US Dollar Index clings to daily gains above 96.50.
The USD/CAD pair struggled to make a decisive move in either direction during the first half of the day as the oil rally offset any potential gains the pair could have posted on the back of broad USD strength. With the greenback gathering further strength in the American trading hours and the barrel of West Texas Intermediate easing from highs, the pair gained traction and rose to a daily high 1.3117. As of writing, the pair was posting small daily gains above the 1.31 mark.
With the U.S. and China announcing a cease-fire in the trade war with an aim to restart negotiations allowed the markets to start the day on a positive note with regards to risk perception. Revived trade optimism provided a boost to crude oil and the barrel of West Texas Intermediate rose to its highest level since May 23 at $60.26. At the moment, the WTI is trading at $59.60, adding 2.5%.
On the other hand, the US Dollar Index capitalized on the upbeat PMI figures today and climbed above the 96.50 in the last hour to help the pair cling to its modest daily gains.
The IHS Markit’s Manufacturing PMI in June ticked up to 50.6 from 50.5 in May and the ISM Manufacturing PMI fell to 51.7 from 52.1 but came in above the market expectation of 51. At the moment, the DXY is up 0.45% on the day at 96.55.
Technical levels to watch for
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