USD/CAD clings to 1.2800 on the back of rising oil prices
- USD/CAD printed a fresh weekly low around the 1.2740’s.
- Mixed market sentiment and rising oil prices boost the Canadian dollar.
- Trudeau’s victory lifts the loonie and the S&P/TSX Toronto Composite Index.
Earlier during the European session, the USD/CAD dipped to a fresh weekly low at 1.2742. However, as American traders got to their desks, the US dollar trimmed some of its losses. The USD/CAD is trading at 1.2814, down 0.09% at the time of writing.
The market sentiment is mixed. US stock indices post gains between 0.03% and 0.35%, while safe-havens flows pressure commodity currencies down.
The US Dollar Index, which measures the buck’s performance against six peers, is barely down 0.01%, sitting at 93.23, weighing on the USD/CAD. Also exerting downward pressure, West Intermediate Texas (WTI) oil is trading at $70.49 up 0.0.14%.
The Canadian dollar recovers after Trudeau wins
In Canada, Prime Minister Justin Trudeau won a third term in a federal election on Monday. Despite the triumph, the political balance barely change. Canada’s stock index S&P/TSX rose 0.7%, following the path of US indices, while the loonie printed a weekly low around the 1.2740’s.
In the Canadian economic docket, the New Housing Price Index on a yearly basis rose to 12.2%, better than the previous year of 11.9%. Meanwhile, the month-over-month reading for August increased 0.7% higher than July’s 0.4%.
In the US on Tuesday, the Housing Starts and Building Permits rose by 3.9% and 6%, respectively, in August.
Meanwhile, the Federal Open Market Committee meeting is underway. On Wednesday, the Federal Reserve will release its monetary policy statement, along with the updated Summary of Economic Projections (SEP). The market expects no change in the interest rate. Regarding a reduction in the bond purchasing program, investors expect a delay on the announcement until November’s meeting.
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