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  • WTI crude oil settles below $56 on Wednesday.
  • US Dollar Index steadies near 98.20 in NA session.
  • Fed’s Barkin says policymakers are monitoring impact of July cut.

The USD/CAD pair slumped to a fresh session low of 1.3285 during the American session after the weekly data published by the Energy Information Administration showed a sharp drop in US crude oil stocks to provide a strong boost to oil prices and helped the commodity-related Loonie gather strength.

However, with the Greenback preserving its strength and the barrel of West Texas Intermediate retracing its rally to settle below the $56 mark, the pair easily reversed its direction and was last seen trading at 1.3310, adding 0.23% on a daily basis.

Dollar gains traction in the second half of the day

Although there were no significant macroeconomic data releases from the US today, the US Dollar Index (DXY) rose above the 98 handle as the selling pressure surrounding the major European currencies allowed the Greenback to find demand.

Later in the day, Richmond Federal Reserve President Thomas Barkin  said that the US economy was doing great but international economies were weakening and added that the uncertainty around trade was elevated. Regarding the Fed’s policy outlook, Barkin said that the Fed will continue to monitor the impact of the July rate cut and noted that he wasn’t yet persuaded that weak inflation was warranting another rate cut and supported the DXY’s rally. At the moment, the DXY is up 0.23% on the day at 98.23.

Technical levels to watch for