USD/CAD climbs to 1.2465 amid broad US dollar weakness

• USD/CAD trims some Monday losses, advances 0.24% during the day.
• US Producer Price Index came in line with expectations, and the market reaction was muted.
• Market participants await Wednesday's CPI numbers, which expect inflation to rise by 5.8% YoY.

The USD/CAD edges higher during the New York session, up 0.12%, trading at 1.2465 at the time of writing. The market sentiment is a mixed bag, as major US equity indices futures fluctuate between gainers and losers. Further, the FX market is in risk-aversion, as traders fly towards the safe-haven currencies, like the Japanese yen and some to the greenback, as confusion meanders in market participants.

Falling US T-bond yields undermine the greenback

Furthermore, the yield curve in the US flattens as the 20s are two basis points above the 30s, while the 10-year losses five basis points sit at 1.444%. Meanwhile,  the US Dollar Index, which tracks the greenback's performance against a basket of its peers, falls 0.15%, currently at 93.90.

However, the USD/CAD is seesawing around the 1.2430-60 area with no apparent bias, awaiting US inflation figures.

On Tuesday, the US economic docket featured the Producer Price Index (PPI) for October, which in its headline, rose 0.6%, a tick higher than the 0.5% expected by analysts. Nevertheless, on a year-over-year figure increased 8.6%, unchanged according to the forecast. Moreover, the Core PPI for the same period on a monthly basis rose by 0.4%, higher than expected, whereas the annual basis number came in line with estimations at 6.8%.

According to the report released by the Bureau of Labor Statistics (BLS), higher energy costs drove the gain. Furthermore, it mentioned how recent months, transportation bottlenecks, material shortages, and increasing labor costs sent prices surging across the economy.

The USD/CAD trader's reaction to the news was muted as investors waited for a speech of Bank of Canada Governor Macklem at 22:45 GMT, alongside Wednesday's US inflation figures. 

On Wednesday, the US economic docket will unveil the Consumer Price Index (CPI) for October, and the Initial Jobless Claims for the week ending on November 6.

Expectations for CPI on a yearly basis are at 5.8%, while excluding food and energy, analysts expect an increase of 4.3%. Concerning US Initial Jobless Claims are expected to rise by 265K, a tad lower than the previous week at 269K.