- USD/CAD prints losses for the previous two sessions consecutively.
- US dollar retreats from the weekly highs over Fed’s dovish stance on the interest rate.
- The Canadian dollar gains on the upbeat economic data and higher crude oil prices.
USD/CAD extends the previous session’s losses in the early European session. The pair breaches the 1.2500 psychological level on Tuesday.
At the time of writing, USD/CAD is trading at 1.2487, down 0.32% for the day.
The Canadian dollar rose against the greenback after the annual inflation rate eased to 3.1% in June, from a 10-year high of 3.6% in May, and as compared to market forecasts of 3.2%.
The optimism was also boosted by the higher crude oil prices and improved market sentiment that helped the loonie to recoil from its lower levels. Crude oil prices, one of Canada’s major exports, traded near at $72.62 with 0.32% gains.
The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals stands lower at 91.15%. The Fed’s dovish tone capped any upside momentum in the greenback.
The Fed kept its benchmark interest rate unchanged at the record-low level of near-zero amid growing concerns over the rising inflation and the Delta variant.
On the economic docket, traders await for the US Price Consumption Expenditure Index (PCE) Index, Gross Domestic Product (GDP), and Initial Jobless Claims data to take fresh trading impetus.
USD/CAD additional levels