- USD/CAD is edging lower in the early American session.
- January core inflation data in US fell short of market expectation.
- WTI trades in tight range above $58 ahead of EIA report.
The USD/CAD pair came under modest bearish pressure in the early American session and broke below 1.2700. As of writing, the pair was down 0.2% on the day at 1.2666.
DXY looks to close lower for the fourth straight day
The monthly report published by the US Bureau of Labor Statistics showed on Wednesday that the Core Consumer Price Index (CPI) in January edged lower to 1.4% from 1.6% and came in lower than the analysts’ estimate of 1.5%. The initial market reaction to soft inflation data weighed on the greenback and the US Dollar Index dropped to a session low near 90.30.
Commenting on the US inflation data, “while there could yet be challenges to the recovery in the form of Covid mutations or vaccine setbacks, the balance of risks is seemingly becoming skewed towards higher inflation for longer than what we thought likely just before Christmas,” said ING analysts.
On the other hand, the barrel of West Texas Intermediate continues to trade in a tight range above $58 ahead of the weekly US oil inventory report, allowing the USD’s market valuation to drive USD/CAD’s movements.
Meanwhile, Canadian Prime Minister Justin Trudeau announced on Wednesday that they will be investing C$15 billion over eight years on public transit to ramp up job creation and economic recovery, possibly helping the CAD stay resilient against its rivals.
Technical levels to watch for
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