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USD/CAD flat around 1.0970

FXStreet (Edinburgh) - The greenback is giving back initial gains, dragging the USD/CAD to challenge session lows in the 1.0970/65 band.

USD/CAD focus on US data

The hawkish tone from the FOMC minutes gave the greenback extra legs yesterday, pushing spot to the vicinity of 1.0990. Today’s US docket grew in importance following the minutes, as the focus will be on the weekly report on the labour market and the housing sector, with Initial Claims and Existing Home Sales due. In the view of Camilla Sutton, Chief FX Strategist at Scotiabank, “The market is in a broad period of USD strength, which is weighing on CAD; however it is noteworthy that the Canadian domestic releases have improved materially, the outlook for the US economy has improved an oil pricing has also turned favourable. However, the BoC is expected to lag the Fed, leaving USDCAD likely somewhat range bound, either side of 1.10”.

USD/CAD levels to watch

At the moment the pair is losing 0.01% at 1.0968 facing the next support at 1.0899 (high Aug.18) ahead of 1.0870 (200-d MA) and finally 1.0861 (low Aug.15). On the upside, a breakout of 1.0986 (high Aug.6) would open the door to1.1007 (high May 2) and then 1.1053 (high Apr.23).

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