Ella 
USD/CAD fell for a third straight day, with the U.S. Dollar Index turning bearish after two straight days of gains. USD/CAD fell to around 1.3560 in Asia on Tuesday. Additionally, crude oil prices held steady after three days of gains, potentially providing support for the Canadian dollar.
On Tuesday in Asia, WTI oil prices were trading around $71.70. Data released last week showed that the U.S. economy maintains a certain degree of resilience, and oil prices rose accordingly.
However, crude oil prices may face challenges as the market continues to worry about global crude oil demand, especially weak economic data from China, the world’s largest oil importer, and other major economies. In addition, despite the production cuts implemented by OPEC+ members, market concerns about oversupply remain.
U.S. bond yields were stable and the U.S. dollar index fell. At press time, the U.S. dollar index fell below 104.00. Strong U.S. employment data boosted the dollar.
As the Federal Reserve begins its two-day monetary policy meeting on Tuesday, consensus expectations are that interest rates will remain unchanged. Market participants will be watching the statement closely for any signals on potential interest rate adjustments in the year ahead.
Additionally, the US Consumer Price Index (CPI) report for November will be released on Tuesday, providing a signal on the potential direction of USD/CAD. In Canada, Bank of Canada (BOC) Governor Tiff Macklem is scheduled to attend the meeting on Friday. The event could be significant, and market participants are likely to pay close attention to the Bank of Canada’s insights or comments on Canada’s economic outlook and monetary policy.
