- USD/CAD pulls away from daily highs during American session.
- Consumer confidence in the US deteriorates in July.
- US Dollar Index clings to small daily gains, stays below 94.00.
The USD/CAD pair rose to a daily high of 1.3407 in the early trading hours of the American session but struggled to preserve its bullish momentum. As of writing, the pair was up 0.22% on the day at 1.3383.
DXY fails to extend rebound amid falling T-bond yields
Earlier in the day, the US Federal Reserve announced that it extended its lending facilities from the end of September to the end of December. With the initial reaction, US Treasury bond yields pushed lower and weighed on the greenback. As of writing, the 10-year US Treasury bond yield was down 3.8% on the day and the US Dollar Index (DXY) was posting small daily gains at 93.77.
Meanwhile, the risk-averse market environment after dismal US data and falling crude oil prices help the pair stay in the positive territory for the time being. Ahead of the American Petroleum Institue’s weekly Crude Oil Stock data, the barrel of West Texas Intermediate is down 1.4% on the day at $41.05, limiting the commodity-related loonie’s gains.
The data published by the US Conference Board (CB) revealed on Tuesday that the Consumer Confidence Index fell to 92.6 in July and missed the market expectation of 94.5. Commenting on the data, “consumers have grown less optimistic about the short-term outlook for the economy and labor market and remain subdued about their financial prospects,” said Lynn Franco, Senior Director of Economic Indicators at the CB.
There won’t be any significant macroeconomic data releases from Canada on Wednesday and investors will wait for the FOMC to release its monetary policy statement at 1800 GMT.
Technical levels to watch for
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