USD/CAD rebounds modestly from weekly lows, stays below 1.2300
- USD/CAD dropped to a weekly low of 1.2251 on Wednesday.
- Retail Sales in Canada fell at a stronger pace than expected in April.
- US Dollar Index stays in the negative territory after mixed PMI data.
The USD/CAD pair extended its daily slide and touched its lowest level in a week at 1.2251 during the early trading hours of the American session on Wednesday. However, the pair managed to stage a recovery in the last hour and was last seen losing 0.15% on the day at 1.2287.
WTI holds near multi-year highs
Despite the broad-based USD weakness and rising crude oil prices, the disappointing data from Canada seems to be making it difficult for the CAD to preserve its strength. Statistics Canada reported that Retail Sales declined by 5.7% on a monthly basis in April, compared to analysts' estimate for a decrease of 5%.
Meanwhile, the barrel of West Texas Intermediate (WTI), which touched its highest level since October 2018 at $74.22, is rising 0.8% on the day at $73.80, helping the commodity-related loonie limit its losses for the time being. A report by the Wall Street Journal claiming that the OPEC+ was planning to increase the group's output by 500,000 barrels per day when they meet next week seems to be supporting crude oil prices.
On the other hand, the data from the US revealed that the Markit Manufacturing PMI reached a new series high of 62.6 in June's preliminary reading. On a negative note, the Markit Services PMI declined to 64.8 in June from 70.4 in May and missed the market expectation of 70 by a wide margin. Following these mixed figures, the US Dollar Index (DXY) extended its slide to a daily low of 91.51 before regaining its traction.
With Wall Street's main indexes posting modest losses after the opening bell, the DXY erased a portion of its losses and was last seen trading flat on the day near 91.70.
Technical levels to watch for