USD/CAD consolidates daily losses near mid-1.30s
- WTI clings to daily gains above the critical $60 mark.
- Core CPI in the US comes in higher than expected in June.
- US Dollar Index erases part of daily losses, remains below 97.
The USD/CAD pair dropped to a weekly low of 1.3040 earlier today and came within a touching distance of 2019 low that it set at 1.3035 earlier in July. With the US Dollar Index staging a modest rebound in the last hour, the pair pulled away modestly from its lows and was last seen down 0.15% on the day at 1.3060.
The USD selloff that was triggered following FOMC Chairman Powell's dovish remarks on the first day of his semi-annual testimony before the Congress yesterday weighed on the pair. Moreover, the sharp drop witnessed in the U.S. crude oil inventories allowed the barrel of West Texas Intermediate to climb above $60, helping the commodity-related loonie gather strength against its rivals.
After slumping to its lowest level since last Friday's NFP-inspired rally at 96.80, however, the US Dollar Index reversed its direction in the last hour supported by the U.S. Bureau of Labor Statistics' inflation report that revealed the core Consumer Price Index (CPI) in June rose to 2.1% on a yearly basis to beat the market expectation of 2%. Although the Fed sees the core Personal Consumption Expenditure (PCE) Price Index as a more reliable gauge of inflation, the US Dollar Index erased a large part of its daily losses and was last seen at 97.01, down 0.08% on the day.
Nevertheless, the fact that the barrel of WTI adds 0.55% on the day at $60.57 makes it difficult for the pair to move into the positive territory.
Technical levels to watch for