USD/CAD sticks to intraday gains around 1.3525 amid weaker Crude Oil prices
|- USD/CAD scales higher for the second successive day on Monday amid sliding Oil prices.
- Retreating US bond yields undermines the USD, though does little to hinder the uptick.
- The US housing market data could produce short-term trading opportunities later today.
The USD/CAD pair is seen building on last week's rebound from the 1.3440 support zone and gaining some positive traction for the second successive day on Monday. Spot prices stick to modest intraday gains through the first half of the European session and currently trade around the 1.3525 region amid weaker Crude Oil prices.
Market participants remain uncertain about the fuel demand outlook amid expectations that higher borrowing costs will dent the economic activity in the US – the world's largest Oil consumer. This, in turn, drags Crude Oil prices away from a multi-week top touched last Thursday, which is seen undermining the commodity-linked Loonie. Adding to this, softer-than-expected Canadian consumer inflation figures released last week exert additional pressure on the Canadian Dollar (CAD) and lend support to the USD/CAD pair.
Meanwhile, the intraday uptick seems rather unaffected by subdued US Dollar (USD) price action, led by retreating US Treasury bond yields. That said, growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer favours the USD bulls and suggests that the path of least resistance for the USD/CAD pair is to the upside. It, however, remains to be seen if spot prices could extend the momentum amid worries about supply disruptions in the Middle East, which could act as a tailwind for Crude Oil prices.
Moving ahead, Monday's release of New Home Sales data from the US, along with the US bond yields and the broader risk sentiment, might drive the USD demand and provide some impetus to the USD/CAD pair. Traders will further take cues from Oil price dynamics to grab short-term opportunities. the focus, however, will remain glued to the US Core PCE Price Index, which will play a key role in influencing the Fed's future policy decisions and determining the near-term trajectory for the currency pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.