The USD/CAD currency pair had significant selling pressure on Wednesday, which led to its decline to a new daily low of 1.3542 during European trading hours. The pair was trading at 1.3555 as of the time of writing, down 0.85% for the day.
The US Dollar remains in the last position on Wednesday due to widespread US Dollar weakness. The US Dollar Index has fallen more than 0.5% daily after Tuesday’s increase and is currently close to 104.00. The 0.5% increase in S&P Futures appears to be detrimental to the US Dollar, which is viewed as a haven as investors wait for critical macroeconomic data to be released.
The ISM will release its December Manufacturing PMI survey. Investors will closely monitor the Prices Paid Index, a measure of inflation, and the primary PMI data. Later in the day, the FOMC will make the minutes of its December policy meeting public.
For the second day running, crude oil prices fell significantly on Wednesday. A West Texas Intermediate barrel is selling slightly around $75 after over 4% of its value was lost on Tuesday. The Canadian Dollar, based on commodities, doesn’t appear to be concerned about oil prices. Thus, for the time being, the market value of the US Dollar continues to determine how the pair moves.
Conclusion
Even though the price of crude oil is falling, the performance of the CAD doesn’t seem to be suffering at the moment.