The USD/CAD faces selling pressure on Tuesday


The USD/CAD faces selling pressure on Tuesday, halting its two-day advance from recent lows. Currently hovering below the 1.3500 mark, the pair appears pressured by rising Crude Oil prices and a softer US Dollar. Oil prices find support for a second day amidst concerns over Middle East supply disruptions following ongoing attacks against commercial vessels. This underpins the commodity-linked Canadian Dollar (Loonie).

The US Dollar Index (DXY) struggles for traction as US Treasury bond yields decline. However, expectations of a delayed Fed rate cut could bolster bond yields and provide some support for the USD, potentially limiting losses for USD/CAD. The pair has traded within a range for the past two weeks, suggesting caution ahead of Thursday’s critical US Personal Consumption Expenditures (PCE) Price Index release, which could provide significant directional cues.

Today’s US economic releases, including Durable Goods Orders, Consumer Confidence Index, and Richmond Manufacturing Index, along with US bond yields, will influence the USD. Additionally, traders will closely monitor Oil price dynamics for short-term opportunities in the USD/CAD pair.


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