USD/CAD pares daily gains, retreats below 1.2700 on renewed USD weakness

• USD/CAD came under modest bearish pressure during American trading hours.
• US Dollar Index edges lower toward 90.20 after US debt auction.
• WTI looks to settle in the negative territory below $53.

The USD/CAD pair climbed to a daily high of 1.2747 in the early American session but failed to preserve its bullish momentum. As of writing, the pair was down 0.15% on a daily basis at 1.2689.

USD weakens on slumping T-bond yields

Earlier in the day, the data published by the US Bureau of Labor Statistics showed that the Core Consumer Price Index (CPI) in December stayed unchanged at 1.6% on a yearly basis. This reading failed to trigger a significant market reaction and the US Dollar Index (DXY) continued to move sideways near 90.30.

In the late US session, however, a sharp decline witnessed in the US Treasury bond yields following the US 30-year debt auction caused the DXY to lose its traction. With the 10-year US T-bond yield losing more than 4% on the day at 1.080%, the DXY erased the majority of its daily gains and was last seen near 90.20.

In the meantime, the barrel of West Texas Intermediate (WTI) is trading with modest losses below $53, keeping the commodity-sensitive loonie's gains limited against its rivals for the time being.

Later in the session, the US Federal Reserve's Beige Book will be looked upon for fresh impetus.

Technical levels to watch for