- USD/CAD continues to push higher in the second half of the day.
- US Dollar Index holds steady slightly above 90.50 on Tuesday.
- Rising crude oil prices don’t seem to be helping CAD find demand.
The USD/CAD moved sideways in a very tight range during the Asian trading hours but managed to gather bullish momentum in the European session and advanced to its highest level in a month at 1.2204. Currently, the pair is up 0.5% on the day at 1.2200.
The renewed USD strength is helping USD/CAD push higher on Tuesday. The US Dollar Index (DXY), which stayed relatively quiet on Monday, regained its traction and rose to the highest level since mid-May at 90.67. Although the DXY seems to have gone into a consolidation phase, it remains on track to register modest daily gains above 90.50.
Earlier in the day, the data published by the US Census Bureau revealed that Retail Sales declined by 1.3% on a monthly basis in May, compared to the market consensus for a decrease of 0.8%. Other data from the US showed the Producer Price Index (PPI) rose to 6.6% on a yearly basis and Industrial Production expanded by 0.8% in May.
Nevertheless, these data don’t seem to be having a significant impact on the USD’s valuation as investors remain on the sidelines while waiting for the FOMC to announce its policy decisions on Wednesday.
Meanwhile, the barrel of West Texas Intermediate (WTI) is trading at its highest level since October 2018 at $72 but the commodity-related loonie is having a difficult time capitalizing on rising crude oil prices.
