USD/CAD struggles to find footing

Key Movers

The dollar index (DXY) has retreated for the third session back-to-back hitting new monthly lows in the 103.40 range. Due to continued uncertainty about the US banking sector, the Federal Reserve, European Central Bank (ECB), Bank of England (BoE), Swiss National Bank, Bank of Canada (BoC), and Bank of Japan announced collaborative action to improve market liquidity. The Fed announced that it will bid daily swaps to these 4 central banks to ensure they have enough liquidity to continue operations. No major US economic data will be released until Wednesday when the Federal Open Market Committee (FOMC) will announce economic projections and federal funds rate changes.

West Texas Intermediate (WTI) crude oil is sitting around $65 to $70 a barrel, compared to $80 at the beginning of the month. Economists at the Bank of Montreal note that prospects for a recovery in prices remain gloomy and, according to some analysts, the oil market is likely going to remain on shaky ground for the rest of the year.

While EUR/USD opened with a bullish gap and rose above 1.0700 to start the week, it lost its grip and retreated toward 1.0650 in the early European morning. Currently, the EUR/USD pair resumes its daily high in the 1.0710 region ahead of the USD opening. Producer Price Index (PPI) data from Germany showed a 0.3% decline on a monthly basis in February following January's 1.2% decrease.

GBP/USD has moved up to the 1.22 zone. This momentum persists uninterrupted through the early North American session and elevates spot prices to a one-month high, around the 1.2240 region. Due to the lack of any major market-moving economic data today, the attention will remain glued to the FOMC decision on Wednesday and the BoE policy meeting on Thursday.