USD/CAD fails to break above 1.3250, erases daily gains as WTI recovers above $54

• WTI rises above $54 ahead of EIA report.
• Annual core CPI in the U.S.  rises by 2.2% in January.
• US Dollar Index sticks to modest gains below 97.

The USD/CAD pair refreshed its session high near 1.3250 in the early NA session but reversed its course as the commodity-related loonie gathered strength on rising crude oil prices. As of writing, the pair was trading at 1.3225, losing 0.11% on a daily basis.

Earlier in the session, the data from the U.S. showed that the core CPI, which excludes volatile food and energy prices, rose 2.2% on a yearly basis to come in slightly above the market expectation of 2.1%. On the other hand, CPI on a monthly basis stayed unchanged for the second month in a row in January. The greenback stayed apathetic  to inflation data but gained traction amid rising  T-bond yields. With the 10-year reference adding more than 1% for the third  straight day, the DXY rose above 97 but struggled to hold there. At the moment, the index is up 0.18% on a daily basis at 96.87.

On the other hand, crude oil extended its rebound into a second day on hopes of OPEC output cuts, which reduced the total output by 800K barrels per day in January according to OPEC’s monthly report,  further supporting prices. Minutes ahead of the weekly EIA stock report, the WTI is up 1.9% on the day at $54.30.

There won’t be any macroeconomic data releases in the remainder of the day and investors will be paying close attention to WTI movements.

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