USD/CAD extends consolidation, sits comfortably above 1.34 mark

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  • NY Empire State Manufacturing Index in June comes in worse than expected.
  • US Dollar Index drops below 97.50 on disappointing data. 
  • Crude oil prices decline on Monday despite heightened geopolitical tensions.

The USD/CAD pair is having a difficult time setting its next short-term direction on Monday as the commodity-sensitive loonie fails to capitalize on a weaker greenback amid falling crude oil prices. As of writing, the pair was virtually unchanged on a daily basis at 1.3410.

The Federal Reserve Bank of New York’s Empire State Manufacturing Index slumped to -8.6 in June from 17.8 and missed the analysts’ estimate of 10 by a wide margin to weigh on the greenback. After spending the majority of the day moving sideways near 97.50, the US Dollar Index turned negative on the day and was last seen down 0.07% on a daily basis at 97.38.

On the other hand, after posting heavy losses last week, crude oil prices started the new week under pressure with the barrel of West Texas Intermediate (WTI) erasing around 1% near the $52 mark and is not allowing the CAD to outperform the USD. Earlier today, Fitch Ratings said that they were expecting the OPEC+ output deal to get extended at least until the end of the year but failed to help crude oil prices rebound.

 This week’s most significant event will be the FOMC meeting on Wednesday. Manufacturing sales on Tuesday and retail sales on Friday will be featured in the Canadian economic docket.

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