USD/CAD clings to modest gains, stays below 1.2100 ahead of FOMC Minutes

  • USD/CAD posts small gains during the American session.
  • US Dollar Index stays below 90.00 as focus shifts to FOMC Minutes.
  • Falling crude oil prices weigh on CAD on Wednesday.

The USD/CAD pair staged a modest rebound during the American trading hours and advanced to a session high of 1.2123 before going into a consolidation phase. As of writing, the pair was up 0.15% on the day at 1.2081.

Eyes on FOMC Minutes

Earlier in the day, the data from Canada showed that the Consumer Price Index (CPI) rose to 3.4% on a yearly basis in April from 2.2% in March. This reading came in higher than the market expectation of 3.2% and helped the CAD gather strength. Nevertheless, the sharp decline witnessed in crude oil prices made it difficult for the commodity-sensitive loonie to continue to find demand.

After losing nearly 2% on Tuesday, the barrel of West Texas Intermediate (WTI) extended its slide and touched its lowest level in three weeks at $61.94. As of writing, WTI was trading at $63.60, where it was down 2.% on a daily basis.

Meanwhile, the US Dollar Index clings to modest daily gains at 89.90 supported by safe-haven flows. Although Wall Street’s main indexes managed to pull away from daily lows, they still lose between 0.3% and 0.7%.

Later in the session, the FOMC will release the minutes of its April meeting and investors will look for fresh clues regarding inflation expectations and the timing of asset tapering.

Technical levels to watch for

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