Ella 
USD/CAD pared recent losses to trade higher around 1.3560 during the Asian session on Monday. USD/CAD rebounded despite higher crude oil prices, which typically provide support to the Canadian dollar as Canada is a major oil exporter. This, in turn, will limit USD/CAD gains.
West Texas Intermediate (WTI) oil prices moved higher to near $79.50 a barrel on Monday. The rise in crude prices came after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decided to extend voluntary oil production cuts of 2.2 million barrels per day into the second quarter, in line with market expectations.
Canada’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) improved slightly, rising to 49.7 from the previous reading of 48.3, but still below the 50.0 threshold that indicates contraction in the industry.
Looking ahead, the Bank of Canada (BOC) will announce its latest interest rate decision next Wednesday. Markets expect the central bank to keep interest rates on hold at 5.0%.
The U.S. Dollar Index (DXY) is hovering near 103.80, seeking direction amid rising U.S. Treasury yields. However, the U.S. dollar (USD) is under downward pressure as U.S. manufacturing contracted in February.
The U.S. ISM manufacturing purchasing managers’ index fell to 47.8 in February from 49.1, well below market expectations of 49.5. In addition, the University of Michigan consumer confidence index fell to 76.9 in February, lower than market expectations of 79.6.
Despite the worrying data, Federal Reserve officials have remained cautious and not signaled any imminent rate cuts. This stance provides some support for the U.S. dollar.
