The USD/CAD currency pair today tested new lows after the release of weak CPI data by the US Bureau of Labor Statistics. The weak crude oil prices in the global market could not allow the currency pair to drop much lower as the Canadian dollar is closely linked to global oil prices.
The USD/CAD currency paid declined by about 100 points after the release of the US CPI data, but had since retraced some of its loses at the time of writing.
The currency pair dropped sharply after the release of the US CPI data for July, which missed expectations by coming in at 1.7%, versus the expected 1.8%. However, the print was higher than the previous month’s figure of 1.6%. The US Dollar Index, which tracks the greenback’s performance against a basket of its main competitors also hit a new low below 93.0. However, it had also recovered from the daily low at the time of writing.
The Canadian dollar was slightly stronger against the US dollar as global crude oil prices struggled to recover from yesterday’s major drop. Investors exercised caution in terms of their current positions on the loonie as the currency is closely linked to global crude oil prices, which are tracked by the West Texas Intermediate.
Due to the empty US and Canadian dockets on Monday, the future performance of the currency pair is likely to be affected by geopolitical issues in the US and global crude oil prices.
The USD/CAD currency pair was trading at 1.2688 as at 14:58 GMT having recovered slightly from a low of 1.2649. The CAD/JPY pair was trading at 86.04 having risen from a low of 85.45 earlier today.
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