USD/CAD climbs back slowly on rising oil prices

Key Movers

The US dollar index (DXY) continued to hold strong above the 106 level after reaching a 10-month high yesterday. US consumer confidence data dipped again to 103, down from 108.7 in August. The Present Situation Index, which is a subindex of consumer confidence that measures the overall consumer sentiment of the present economic situation, was slightly higher than last month at 147.1, up from 146.7. Meanwhile, the Expectations Index, which focuses on consumers’ short-term outlook for income, business, and labour market conditions, was much lower at 73.7 from 83.3. A reading below 80 historically signals a recession within the next year. US new home sales declined to 675,000 versus the expected 700,000. New home demand is down significantly amid higher interest rates for new mortgages. US home prices climbed for the sixth month in a row, 0.6% month-over-month due to low inventory.

In European news, the EUR levelled out against the USD in today’s Asian and European sessions after hitting a 6-month low yesterday. The EUR/USD pair has been heading lower consistently since mid-July, meaning that it is now on its way to its 11 straight week of losses.

The GBP/USD pair continued to fall after yesterday’s 6-month low. The pound sell-off continues following the Bank of England’s (BoE) and the Federal Reserve’s announcements in recent weeks.

Australia will report year-over-year Consumer Price Index (CPI) data tonight. As a major currency, the AUD CPI reading helps provide guidance on where inflation stands globally.