USD/CAD rebounds modestly, trades around 1.2620 ahead of key event
- USD/CAD stages modest recovery after dropping below 1.2600.
- WTI trades in a relatively tight range above $62.
- Eyes on FOMC Chairman Powell's testimony and BoC Governor Macklem's speech.
The USD/CAD pair dropped to 1.2580 earlier in the day as the surging crude oil prices allowed the commodity-related loonie to continue to outperform its rivals. With the greenback gathering some strength during the European trading hours, the pair staged a rebound and was last seen posting small daily gains at 1.2618.
WTI stays close to 13-month highs above $62
On Monday, the barrel of West Texas Intermediate (WTI) gained more than 5% boosted by heightened optimism for a steady recovery in global energy demand and production disruptions due to bad weather conditions in the US. After touching its best level in more than a year at $62.97 earlier in the day, WTI seems to have gone into a consolidation phase around $62.30 ahead of the API's Weekly Crude Oil Stock report.
Meanwhile, the US Dollar Index is clinging to small daily gains above 90.10 as investors stay on the sidelines while waiting for FOMC Chairman Jerome Powell's semi-annual testimony before the Senate Banking Committee at 1500 GMT.
If Powell comments on surging US Treasury bond yields and addresses inflation concerns, the greenback could start gathering strength against its rivals. However, Powell is largely expected to reaffirm that the Federal Reserve will not react to transient increases in inflation while reiterating that it's premature to talk about tapering asset purchases.
Additionally, Bank of Canada Governor Tiff Macklem is scheduled to deliver a speech at 1730 GM as well.
Technical levels to watch for