- USD/CAD is posting modest daily losses ahead of American session.
- US Dollar Index stays relatively quiet around 92.50.
- Crude oil prices regain traction after Tuesday’s sharp decline.
The USD/CAD pair gained more than 100 pips on Tuesday and reached its highest level since late April at 1.2495. On Wednesday, the pair seems to have gone into a consolidation phase and was last seen losing 0.2% on the day at 1.2438.
The sharp decline witnessed in crude oil prices weighed heavily on the commodity-related loonie on Tuesday. The barrel of West Texas Intermediate lost more than 3% amid concerns over OPEC+ producers ramping up output after failing to reach an agreement on the group’s output strategy. Nevertheless, WTI managed to stage a rebound and is currently rising more than 1% at $74.65.
On the other hand, the broad-based USD strength provided an additional boost to USD/CAD. The poor performance of Wall Street’s main indexes caused a negative shift in market sentiment and helped the greenback to outperform its rivals as a safe haven. Following Tuesday’s 0.35% gain, the US Dollar Index is moving sideways around 92.50, allowing CAD’s market valuation to impact the pair’s action.
Later in the day, the FOMC will release the minutes of its June meeting. The Ivery Purchasing Managers Index data will be featured in the Canadian economic docket as well.
FOMC Minutes June Preview: A view of the Jackson Hole agenda.
