USD/CAD edges higher amid thin market

The US Dollar has regained some momentum and managed to climb against the Canadian counterpart. The USD/CAD pair bounces off nearby the 50-day Exponential Moving Average (EMA) at 1.3532 and rises toward the 20-day EMA, during the first trading day of 2023 in the US session, so, the pair is trading at 1.3576 at the time of writing amid thin liquidity conditions after hitting a low of 1.3535.

Most markets are closed on the observance of new year eve. The lack of US and Canadian economic data keeps traders leaning on market mood.

European equities are maintaining positive performance and are seen higher in low-volume conditions. The US Dollar Index, a gauge of the buck’s value against a basket of six currencies, advances 0.14% to 103.63, off six-month lows hit during the last week at 103.38.

Ahead of the week, Tuesday’s economic docket will feature the S&P Global Manufacturing PMIs for both countries, with Canada’s PMI expected to drop to 49.2, below the previous month’s reading of 49.6. Concerning the US, the PMI is estimated to stay unchanged compared to November’s 46.2 reading.

Meanwhile, the ISM Manufacturing PMI reading for Wednesday is expected to further contract below the 49.0 mark, increasing the odds of a recession in the United States. US docket will release December’s Federal Reserve (Fed) last meeting minutes, which would shed some light regarding the 2023 monetary policy overview.