- USD/CAD gained traction in the early European session on Tuesday.
- US Dollar Index posts strong daily gains near 104.50.
- WTI continues to fluctuate in tight range slightly above $80.
USD/CAD gathered bullish momentum and advanced beyond 1.3600 in the European session on Tuesday following a drop toward 1.3500 earlier in the day. At the time od press, USD/CAD was up 0.4% on the day at 1.3625.
The broad-based US Dollar strength seems to be fueling the pair's rebound ahead of the Manufacturing PMI data from Canada and the US.
With market participants returning from the New Year holiday early Tuesday, the market volatility heightened and the US Dollar started to outperform its rivals despite the improving market mood.
The US Dollar Index, which tracks the US Dollar's performance against its major rivals, was last seen rising 1.1% on the day at 104.60. It's difficult to pinpoint the catalyst behind the renewed US Dollar strength as the 10-year US Treasury bond yield is down more than 2% and US stock index futures are up more than 1%.
In the second half of the day, S&P Global will release the December Manufacturing PMI surveys for Canada and the US. Since the US PMI data will be a revision, the market reaction to Canada PMI is likely to drive the action.
Meanwhile, the barrel of West Texas Intermediate fluctuates in a tight channel at around $80.00, allowing the US Dollar's valuation to steer the pair's movements. Traders are trying to figure out how the reopening steps taken by China will influence the energy demand outlook.
Technical levels to watch for
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.