USD/CAD retraces early drop, turns flat on the day above 1.31
- Crude oil rally loses steam on Tuesday, WTI eases below $59.
- US Dollar Index goes into consolidation below 97 following Monday's upsurge.
- Coming up: June Markit Manufacturing PMI from Canada.
The USD/CAD pair dropped toward the 1.31 mark earlier in the day but didn't have a tough time finding support in that area. As of writing, the pair was virtually unchanged on a daily basis at 1.3127.
With the U.S. and China deciding to restart trade talks following the meeting between President Trump and President Xi over the weekend at the G20, crude oil started the week on a positive note and the barrel of West Texas Intermediate rose above the $60 mark for the first time since the last week of May. However, with OPEC+ looking to extend the output cut for nine more months, WTI lost its traction and dropped below $58 to make it difficult for the loonie to stay resilient against the dollar.
On the other hand, the US Dollar Index, which rose sharply Monday on the back of rising T-bond yields and upbeat Manufacturing PMI data, seems to be staying in a consolidation phase below the 97 mark on Tuesday amid a lack of fresh fundamental drivers.
Later in the session, markets will be paying close attention the IHS Markit's final reading of June Manufacturing PMI for Canada. Markets expect the PMI to come in at 49 in June to show a contraction in the sector.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
