USD/CAD inches higher on Powell’s remarks, looks to snap 6-day losing streak

• Fed’s Powell says economic data don’t point to a slowdown.
• US Dollar Index continues to retrace Wednesday’s fall.
• WTI looks to settle above $52.

The USD/CAD pair rose to a fresh daily high near 1.3250 in the late NA session as the dollar continued to gather strength on the back the latest comments from FOMC Chairman Jerome Powell. With the markets turning quiet toward the end of the day, the pair was trading at 1.3230, adding 0.1% on a daily basis.

The US Dollar Index’s sharp drop that was caused by the dovish tone of the FOMC minutes on Wednesday lost momentum on Thursday and the index staged a modest rebound during the first half of the day. With Jerome Powell saying that the Fed had no particular plan to raise rates a specific number of times while reiterating that the economic data didn’t point to a slowdown and the risk of a recession was non-existent, the dollar continued to outperform its rivals and the DXY touched a fresh daily high of 95.62. At the moment, the index is up 0.4% on the day at 95.54.

On the other hand, crude oil’s impressive recovery that started when investors returned from the New Years holiday last week lost steam today to make it difficult for the commodity-sensitive loonie to stay defensive. Although the WTI looks to settle higher for the eighth straight day, it’s likely to have a difficult time pushing higher in the near-term as it’s still unclear how much the new OPEC+ output cut will be able to help balance the oil market.  

Technical levels to consider