- WTI plummets to mid-$67s after the EIA’s weekly report.
- The US Dollar Index retraces daily losses to turn flat near 95.10.
- Fed’s Williams argues against further rate hikes.
The USD/CAD pair gained traction in the last hour and touched its highest level since July 20 at 1.3225 as the sharp fall seen in crude oil prices weighed on the commodity-sensitive loonie. At the moment, the pair is up 0.3% on the day at 1.3217.
Although the weekly report published by the EIA showed that crude oil inventories in the U.S. decreased by 4.3 million barrels, the barrel of West Texas Intermediate fell sharply. The report further revealed that the gasoline production averaged 10.2 million barrels per day in the week ending August 31 while distillate fuel production increased to 5.4 million barrels per day. At the moment, the barrel of WTI is down 1.5% on the day at $67.60.
In the meantime, speaking at a panel in Buffalo, New York, New York Fed President Williams argued that the lack of inflationary pressure meant that there was no need to raise rates further in the near-term.
Earlier in the day, the data released by the ADP showed that the private sector employment in the U.S. rose 163K to fall short of the market expectation of 190K. Although the US Dollar Index fell below the 95 mark with the initial reaction to the data, the non-manufacturing PMI report released by the IHS Markit pointed out to that the business activity in the service sector continued to expand at a robust pace to limit the greenback’s losses. At the moment, the DXY is virtually unchanged on the day at 95.12.
Technical levels to consider
Resistances for the pair align at 1.3290 (Jul. 19 high), 1.3350 (Jun. 28 low) and 1.3385 (Jun. 27 high). On the downside, supports could be seen at 1.3200 (psychological level), 1.3160 (daily low) and 1.3080 (50-DMA).
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