Categories
Forex News

USD/CAD biggest daily cut in a month drops below 1.2700 amid oil price drop

USD/CAD biggest daily cut in a month drops below 1.2700 amid oil price drop

USD/CAD is filling a wound around 1.2675 during Tuesday’s mid-Asia session, following its biggest daily drop in four weeks. Cautious market optimism lowers prices of Canada’s main export, WTI crude, to support the latest rally. However, mixed concerns and a sense of caution ahead of the US and Canadian December trade numbers seem to be testing the Loonie pair’s recent corrective downside.

That said, WTI Crude Oil prices extend the previous decline from multi-day highs, falling 0.4% on the day around $90.00 by press time. In doing so, the black gold seems to justify the recent pause in US Treasury yields, after falling from two-year highs on Monday. The Sino-US trade wars and recent disappointing China data also pose challenges for oil traders. However, it should be noted that the risk of a war between Russia and Ukraine and concerns about the inability of OPEC+ members to meet production targets are raising hopes among oil buyers’ energy. Elsewhere, trucking protests in Canada and the US-China trade wars also seem to boost USD/CAD amid a slowing Asian session.

Against this backdrop, 10-year US Treasury yields rose 1.6 basis points to 1.93%, near their highest levels since late 2020, while equity futures of the US, the nearest slight increase was around 4,485. That said, benchmark US Tbond coupons fell from two-year highs the previous day as Wall Street closed slowly. Additionally, stocks in the Asia-Pacific region are also rallying to reflect a slightly more positive market sentiment.

Going forward, the US Balance of Trade in Goods and Services for December, expected at $83 billion from $80.2 billion, will rank ahead of Canada’s International Trade in Goods for specified month, projected at $2.62 billion versus $3.13 billion, for the entertainment of the day USD/CAD traders. pair. However, special attention will be focused on risk catalysts and the US Consumer Price Index on Thursday for January.