- US Dollar Index recovers from daily lows after PMI data.
- WTI clings to modest gains above $60 on Monday.
- Key data releases from Canada includes CPI and Retail Sales this week.
The USD/CAD slumped to its lowest level in nearly six weeks at 1.3113 on Monday pressured by the broad USD weakness and the positive impact of rising crude oil prices’ on the commodity-sensitive CAD. With the trading action turning subdued, the pair retraced a large portion of its daily drop and was last seen trading at 1.3145, still down 0.15% on a daily basis.
The data from China at the start of the week showed that both Industrial Production and Retail Sales rose more than expected on a yearly basis in November to ease concerns over a slowdown in the world second-largest economy and allowed crude oil prices to push higher. Additionally, the completion of phase-one US-China trade deal, in spite of uncertainty around important details, provided an additional boost. The barrel of West Texas Intermediate (WTI) looking to settle 0.8% higher on the day at $60.25.
PMI data helps USD recover
The greenback struggled to find demand during the first half of the day and the US Dollar Index (DSY) slumped to a daily low of 96.93 to cause the bearish pressure on the pair to remain intact. However, IHS Markit’s Manufacturing PMI came in at 54.5 in December’s preliminary reading to reveal ongoing expansion in the US manufacturing sector’s economic activity and triggered a rebound in the index. As of writing, the index was down 0.1% on the day at 97.07.
Later this week, the Canadian economic docket will feature the Consumer Price Index (CPI) data on Wednesday and Retail Sales figures on Friday. Investors will pay close attention to the Gross Domestic Product (GDP) and the core Personal Consumption Expenditures (PCE) Price Index from the US on Friday as well.
Technical levels to watch for
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