USD/CAD struggles at 1.2700 as WTI trades above $74.00
- USD/CAD dropped 40-pips on the back of WTI’s climb to new monthly highs.
- Market sentiment dampened the appetite for high-beta currencies, like the loonie.
- In the next week, the Canadian GDP report will be the focus for investors.
Early in the American session, the loonie was trading above 1.2700 on the back of dampened market sentiment caused by various factors. However, as the session progresses, the USD/CAD is barely up 0.09%, trading at 1.2667 at the time of writing.
As previously mentioned, the market sentiment is downbeat. Evergrande’s concerns of a possible spillover could materialize. The Chinese real-estate giant failed to pay the interest in the dollar-denominated bond due on Thursday, though it has 30-days to fulfill the coupon. Additionally, the Federal Reserve’s prospect of bond tapering later in the year, and half of the FOMC members looking for a rate hike in the second half of 2022, according to the dot-plot, also weighed in the mood.
WTI reached a new two-month high above $74.00
Back to USD/CAD, oil prices are on the front foot. WTI’s rose to a monthly high of $74.14, a gain of 1.10% during the day, boosting the oil commodity-currency loonie, as the pair struggled at 1.2700 before the New York session open.
Meanwhile, the US Census Bureau unveiled the New Home Sales for August, which rose to 0.74M better than 0.70M foreseen and 0.708M of the previous reading. The US Dollar Index showed no reaction to the report, and at the release, was trading at 93.29, up 0.23%.
In the next week, the Canadian economic docket, on Thursday, will unveil the Gross Domestic Product for July expected at 0.7% on a monthly basis. Meanwhile, on Friday, the Marking Manufacturing PMI for September foreseen at 57.2 will be released.
In the US, on Monday, the US Census Bureau will release the Durable Goods Orders for August, expected to rose by 0.6%. Further, Nondefense Capital Goods Orders excluding Aircraft will also be revealed.
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