- USD/CAD extends its losses for the third consecutive day as the US Dollar halts its gains.
- WTI price hovers with a positive sentiment on resilience in the US economy.
- FOMC embarks on its two-day policy meeting on Tuesday; US CPI for November will also be eyed.
USD/CAD continues its losing streak for the third successive day as the US Dollar Index (DXY) turns negative post two days of gains. The USD/CAD pair trades lower around 1.3560 during the Asian session on Tuesday. Moreover, Crude oil prices hold steady after a three-day winning streak, potentially providing support for the Canadian Dollar (CAD).
West Texas Intermediate (WTI) trades near $71.70 per barrel during the Asian session on Tuesday. Oil prices saw an upswing following last week's data release, signaling a level of resilience in the United States (US) economy.
However, Crude oil prices could encounter challenges due to ongoing concerns about global demand, especially with weak economic data from China, the world's largest oil importer, and other major economies. Additionally, worries persist about oversupply, despite production cuts imposed by OPEC+ members.
The US Dollar Index (DXY) loses ground amid stable US Treasury yields. The DXY bids lower below 104.00 at the time of writing. The US Dollar gained momentum from robust employment figures in the United States (US).
As the Federal Open Market Committee (FOMC) embarks on its two-day monetary policy meeting on Tuesday, the consensus expectation is for interest rates to remain unchanged. Market participants will closely scrutinize the statement for any indications regarding potential rate adjustments in the coming year.
Additionally, Tuesday will be marked by the release of the US Consumer Price Index (CPI) report for November, offering insights into potential paths for monetary policy. In Canada, the Bank of Canada (BoC) Governor Tiff Macklem's appearance is scheduled for Friday. This event could be significant, and market participants will likely pay close attention to any insights or comments regarding the Canadian economic outlook and monetary policy.
(The story was corrected at 09:00 GMT on Tuesday to say, in the first bullet point, that USD/CAD extends its losses, not gains.)
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