The USD/CAD pair recovers a few pips from over a one-week low touched during the early North American session and is currently placed around the 1.3350-1.3355 area, up less than 0.10% for the day.
A modest downtick in the US Treasury bond yields and an intraday turnaround in the equity markets prompt some selling around the safe-haven US Dollar and exert pressure on the USD/CAD pair. That said, a combination of factors helps limit any further losses and assists spot prices to attract some buyers near the 1.3325 regions.
Crude oil prices once again fail near a technically significant 200-day SMA and kick off the new week on a weaker note. This, in turn, is seen undermining the commodity-linked Loonie. Apart from this, the Fed’s prospects for further policy tightening act as a tailwind for the greenback and contribute to limiting losses for the USD/CAD pair.
Investors seem convinced that the US central bank will stick to its hawkish stance, and the risk of higher US inflation print for January fueled the bets. Hence, the focus will remain glued to the crucial US CPI report, due for release on Tuesday, which will influence the Fed’s rate-hike path and drive the USD demand in the near term.
Ahead of the key data risk, the US bond yields and the broader risk sentiment will play a key role in influencing the greenback without any relevant market-moving economic data. Besides, traders will take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.