USD/CAD holds monthly support near 1.2520 on softer USD

• USD/CAD prints mild gains on the first trading day of the week.
• US Dollar Index pares part of its previous week gains on dismal data.
• The Canadian dollar weighs down by weaker commodity prices, Trudeau calls for snap elections.

USD/CAD extends the previous week sluggish movement with minute gains on Monday in the initial Asian session. The pair hovers in a very narrow trade band with a neutral stance.

At the time of writing, USD/CAD is trading at 1.2515, up 0.01% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against the six major currencies, trades near to its one-week low level, tracing downbeat US consumer sentiment.

The University of Michigan Consumer Sentiment dropped to 70.2 in July as compared to 81.2 in the previous month. The softer data pointed to the concerns on the global economic recovery due to the rapid spread of the delta variant.

On the other hand, the Canadian dollar failed to impress investors on falling oil prices on demand concerns.

Oil prices remained subdued on Monday following the International Energy Agency (IEA) warning on the surge in infections from the Delta Variant of COVID-19, which could halt the growing demand for Crude in the second half of the year.

In the latest development, Canadian Prime Minister Justin Trudeau called a snap early election for September 20. This, in turn, added uncertainty to the prospects of the Canadian dollar.

As for now, traders are waiting for Canadian Manufacturing Sales data to trade fresh trading impetus.

USD/CAD additional levels