USD/CAD clings to gains above 1.2600 as rising US T-bond yields support USD
- USD/CAD is rising for the second straight day on Wednesday.
- US Dollar Index turns positive above 92.30 in the early American session.
- 10-year US Treasury bond yield is up 1% ahead of FOMC Minutes.
The USD/CAD pair managed to post modest gains on Tuesday and preserved its bullish momentum to touch a fresh weekly high of 1.2618 on Wednesday. As of writing, the pair was up 0.33% on a daily basis at 1.2606.
Eyes on FOMC Minutes
Following Tuesday's sharp drop, the benchmark 10-year US Treasury bond yield is up 1% on Wednesday, helping the greenback stay resilient against its rivals. At the moment, the US Dollar Index is posting small daily gains at 92.35.
There won't be any significant macroeconomic data releases featured in the US economic docket and investors will keep a close eye on US President Joe Biden's speech on the spending plan and the FOMC Minutes.
Previewing the FOMC's publication, "one issue to watch for is potential discussion among FOMC participants on the topic of how they might change their policy rate views for lengthy holds if their relatively upbeat forecasts for growth, jobs and inflation were to come to fruition," noted Scotiabank analysts. "That's because Chair Powell said in the press conference that "part of that is wanting to see actual data and not just forecasting it."
On the other hand, the barrel of West Texas Intermediate is rising more than 1% on the day, limiting USD/CAD upside for the time being. Ivey Purchasing Managers Index and International Merchandise Trade data from Canada will be looked upon for fresh impetus as well.
Technical levels to watch for