USD/CAD trades higher near 1.3550 as Crude falls, focus on US PMI, Canada Retail Sales

• USD/CAD extends gains as an effect of the drop in Crude oil price.
• US PMI data and Canada Retail Sales could give fresh insights into both economies.
• US Dollar Index (USD) shows resilience despite the drop in US Treasury yields.

USD/CAD treads water to continue its winning streak, hovering around 1.3550 during the early trading hours in the European session on Wednesday. The USD/CAD currency pair experiences upward pressure due to the drop in crude oil prices, attributed to concerns over the global economic slowdown and hopes of China’s fiscal stimulus decline.

EUR/USD traders await the upcoming releases of preliminary PMI data for August from the United States (US) along with monthly figures of Canada’s Retail Sales in June. These datasets could provide insights into the economic situations of both countries, offering fresh impetus for placing trades in the USD/CAD pair. The market participants will also closely watch the upcoming Jackson Hole annual symposium starting on Thursday, followed by Fed Chair Powell’s speech scheduled to be held on Friday.

The US Dollar Index (DXY), gauging the Greenback's strength against six key currencies, shows resilience by continuing the winning streak despite the correction in United States (US) Treasury yields. The 10-year US bond yields dropped to 4.26%, down by almost 1.80% in two days. At the time of writing, the DXY is trading higher near 103.70.

However, data released on Tuesday revealed that downbeat US housing data put pressure on the US Dollar (USD). As said, the annual US Existing Home Sales declined 2.2% to the figure of 4.07M in July, below the market consensus of 4.15M. The Richmond Fed Manufacturing Index improved in August from -9 to -7, as expected.