- USD/CAD pair fluctuates in narrow band for second straight day.
- US Dollar Index drops below 91.00 ahead of US data.
- WTI continues to consolidate weekly losses, hols above $61.
Following Wednesday’s sharp drop, the USD/CAD pair went into a consolidation phase and continues to have a difficult time making a decisive move in either direction ahead of the weekend. As of writing, the pair was virtually unchanged on a daily basis at 1.2500.
The Bank of Canada (BoC) decided to lower its weekly bond purchases and said that current macroeconomic projections point to a possible rate hike in the second half of 2022. The BoC’s hawkish forward guidance allowed CAD to gather strength against its rivals and weighed on USD/CAD.
USD/CAD struggles to capitalize on USD selloff
On Friday, the pair stays relatively quiet despite the broad-based selling pressure surrounding the greenback as the modest decline witnessed in crude oil prices seems to be keeping CAD’s potential gains limited. At the moment, the barrel of West Texas Intermediate (WTI) is down 0.4% on the day at $61.40.
Later in the session, the IHS Markit will release the preliminary April Manufacturing and Services PMI figures for the US. Ahead of these data, the US Dollar Index is losing 0.35% at 91.95, not allowing USD/CAD to push higher beyond 1.2500.
In the meantime, Wall Street’s main indexes look to open in the positive territory, suggesting that the USD could remain on the back foot in the second half of the day. Despite the positive impact of the BoC’s policy outlook on the CAD, however, USD/CAD stays on track to finish the week flat around 1.2500.
Technical levels to watch for
Share
