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  • Crude oil prices turned south to weigh on the commodity-sensitive CAD.
  • The Fed’s meeting minutes failed to deliver any surprises.  
  • US Dollar Index stays flat on the day above the 99 handle.

After spending the large portion of the day moving sideways a little above the 1.33 mark, the USD/CAD pair edged higher in the last couple of hours as the commodity-sensitive Loonie weakened on falling crude oil prices. As of writing, the pair was up 0.06% on the day at 1.3332.

Although heightened hopes of the United States and China reaching a partial trade deal later this week and escalating tensions in the Middle East following Turkey’s launch of a military operation into northeast Syria helped crude oil prices rise today, the barrel of West Texas Intermediate erased a large portion of its daily gains after the United States (US) Energy Information Administration (EIA) reported a larger-than-expected buildup in crude oil stocks. As of writing, the WTI was up 0.5% at $52.80.

US Dollar Index stays in a consolidation phase

In the meantime, in  the minutes of its September 17-18  monetary policy meeting, the Federal Open Market Committee’s (FOMC) noted that most  policymakers believed that a 25 basis points rate cut was needed and pointed to the economic outlook, risk management and inflation objectives.

“Several policymakers favoured keeping rates steady, saying baseline economic projection had changed very little and that uncertainties would not derail the expansion,” the FOMC said in its publication but failed to trigger a meaningful market reaction with the US Dollar Index staying flat on the day at 99.12.

On Thursday, the US economic docket will feature the Consumer Price Index (CPI) data, which is expected to tick up to 1.8% on a yearly basis in September.

Technical levels to watch for