USD/CAD extends steady recovery from multi-month tops post-US PPI, still in the red
- A follow-through uptick helped the USD to regain positive traction and extended some support.
- Investors further scale back expectations for aggressive Fed rate cut on upbeat US PPI figures.
- A modest pullback in Oil prices undermined Loonie and remained supportive of the rebound.
The USD/CAD pair held on to its weaker tone through the early North-American session, albeit has managed to recover few pips from multi-month lows set earlier this Friday.
The pair extended this week's pullback from the 1.3140-45 supply zone and remained under some heavy selling pressure for the third consecutive session, hitting 8-1/2 month lows on the last trading day of the week.
However, a follow-through pickup in the US Treasury bond yields helped limit the intraday US Dollar downtick, at least for the time being, and assisted the pair to find decent support ahead of the key 1.30 psychological mark.
Meanwhile, Friday's release of hotter-than-expected Produce Price Index (PPI) from the US added to Thursday's stroner consumer inflation figures and further tempered expectations for an aggressive monetary easing by the Fed.
This coupled with a modest pullback in Crude Oil prices undermined demand for the commodity-linked currency and further collaborated to the pair's recovery of around 20-pips from the lowest level since late-Oct. 2018.
Next in focus will be a scheduled speech by Chicago Fed President Charles Evans, which might further influence market expectations about the Fed's policy outlook and produce some meaningful trading opportunities.
Technical levels to watch