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  • US Dollar Index looks to close the day above 98.
  • WTI trades in tight range above the $56 mark.  
  • FOMC is expected to announce a 25 bps cut to its policy rate on Wednesday.

After closing the second straight week higher last Friday, the USD/CAD pair is struggling to make a decisive move in either direction on Monday and is moving sideways near 1.3170 mark, staying flat on the day.

Later this week, markets will be paying close attention to the FOMC’s policy announcements. Earlier today, US President Trump argued in a Twitter thread that a “small rate cut” wouldn’t be enough. Participants expect the Fed to cut its policy rate by 25 basis points and this move seems to be already priced in.

Chairman Powell’s remarks on the outlook, however,  will be looked upon for fresh clues regarding any further rate cuts in the remainder of the year and are likely to drive the USD’s market valuation.

Dallas Fed Manufacturing improves slightly in July

The only data from the US today showed that the Dallas Fed’s Manufacturing Index improved to -6.3 in July from -12.1 but was largely ignored by the market participants. At the moment, the US Dollar Index is up 0.25% on the day at 98.15, looking to post its highest weekly close in nearly two months.

On the other hand, crude oil prices are staying in a consolidation phase on Monday with the barrel of West Texas Intermediate moving in a tight range a little above the $56 handle, not allowing the commodity-related CAD to gather strength.

Technical levels to watch for