USD/CAD improves to 1.3380 as Crude prices falls on Saudi's price cuts, output increase
- USD/CAD gains ground as Crude oil prices decline.
- WTI price falls on Saudi’s price cuts and OPEC+ oil output increase.
- US Dollar remains silent amid improved risk appetite.
USD/CAD continues to gain ground for the second straight day, trading near 1.3380 during the European session on Monday. The Canadian Dollar (CAD) receives downward pressure against the US Dollar (USD) due to the decline in Crude oil prices.
West Texas Intermediate (WTI) price undergoes a retracement of its recent gains, trading lower near $73.00 per barrel, by the press time. The decline in Crude oil prices is attributed to a combination of factors, including price cuts by top exporter Saudi Arabia. Additionally, a rise in the Organization of the Petroleum Exporting Countries and its allies (OPEC+) oil output is contributing to the downward pressure on oil prices.
The US Dollar Index (DXY) remains silent near 102.40 with a negative bias, potentially influenced by the improved risk appetite after the mixed US economic data released on Friday.
US Nonfarm Payrolls (NFP) rose to 216K in December, showing improvement from the 173K reported in November and surpassing the market expectation of a rise to 170K. Additionally, Average Hourly Earnings (Year-over-Year) improved to 4.1% from the previous figure of 4.0%. The monthly index remained consistent at 0.4%, defying the expected decline of 0.3%. These positive developments reflect a robust performance in employment and wage growth, providing insights into the health of the US labor market.
In contrast to the positive developments in the job market, the Institute for Supply Management (ISM) reported a slowdown in the services sector for the same month. The Services Purchasing Managers Index (PMI) came in at 50.6, falling below the expected 52.6 and the previous figure of 52.7. This data indicates a deceleration in the services sector, raising considerations about the overall economic activity in that particular segment.
The mixed signals from different economic indicators underscore the complexity of assessing the overall health of the economy, and traders will likely eye the upcoming Consumer Price Index data on Thursday to gain more clarity on the US economic scenario.