USD/CAD pares daily gains, trades below 1.2300 ahead of PMI data
- USD/CAD trades in a relatively tight range on Monday.
- US Dollar Index pushes lower toward 91.00 after Friday's rally.
- Focus shifts to Manufacturing PMI data from Canada and US.
The USD/CAD pair lost nearly 200 pips last week as the upbeat macroeconomic data releases from Canada and rising crude oil prices provided a boost to the CAD. At the start of the week, the pair staged a technical rebound and rose to 1.2320 area before losing its traction. As of writing, the pair was virtually unchanged on the day at 1.2287.
Eyes on US and Canada Manufacturing PMI
The risk-positive market environment is making it difficult for the greenback to attract investors on Monday. The US Dollar Index, which rose more than 0.7% on Friday, is currently losing 0.22% on a daily basis at 91.10.
On the other hand, the barrel of West Texas Intermediate is posting modestly daily gains around $63.50, helping the CAD stay resilient against its American counterpart.
Later in the session, the IHS Markit will release the April Manufacturing PMI figures for both the US and Canada. The ISM Manufacturing PMI will be featured in the US economic docket as well. Finally, FOMC Chairman Jerome Powell will be delivering a speech at 1820 GMT.
In the meantime, the S&P 500 Futures are up 0.5%, suggesting that risk flows are likely to continue to dominate the financial markets in the second half of the day.
Technical levels to watch for