- USD/CAD receives upward support after the moderate US data on Friday.
- US bills were successfully passed to avert a government shutdown, securing funding until November 17.
- The recovery in Crude oil prices could limit the losses of the Canadian Dollar.
USD/CAD kicks off the week by continuing the gains in the second trading session. The spot price is bidding the quotes higher around 1.3580 during the early Asian session on Monday.
The US Dollar Index (DXY) holds ground to continue to gain in the second trading session after the moderate datasets from the United States (US). The spot price bids higher around 106.20.
Additionally, the upbeat US Treasury Yields are contributing support to the USD’s strength. The yield on the 10-year US Treasury bond stands at 4.61% by the press time, up by 0.96%.
The USD/CAD pair faces upward support, primarily due to the upbeat US Dollar (USD) after the moderate economic data released on Friday. The US Michigan Consumer Sentiment Index (Sep) improved to 68.1 from the previous figure of 67.7, which was expected to remain unchanged.
US Core PCE – Price Index (YoY) for August rose 3.9% as estimated, eased from the previous reading of 4.3%. Core PCE (MoM) showed a soft reading of 0.1% against the market consensus to be consistent at the 0.2% prior.
Following the Friday session, bills were successfully passed in the US to avert a government shutdown, securing funding until November 17. This development has prompted a resumption of the US Dollar Index (USD) upward trajectory.
On the other side, the CAD received downward pressure due to the downbeat Gross Domestic Product (MoM) data for July, which reported flat at 0.0% against the market expectations of 0.1% growth. The GDP was at 0.2% contraction in June.
Crude oil prices retreated from one-year highs over the last two trading sessions in the previous week, due to market caution on the Fed’s interest rates trajectory. This development weakened the Canadian Dollar (CAD) against the Greenback as Canada is the biggest oil exporter to the United States (US).
However, Western Texas Intermediate (WTI), the US crude oil benchmark attempts to break the losing streak on Monday, trading around $90.10 per barrel.
Traders await US ISM Manufacturing PMI for September ahead of the Fed’s Chair Jerome Powell’s speech on Monday. The Canada’s S&P Global Manufacturing PMI (Sep) will also be eyed.