USD/CAD climbs to 1.2650 on unabated USD strength

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  • USD/CAD gained traction after falling to 1.2600 area.
  • US Dollar Index posts strong gains above 90.50.
  • WTI trades in the negative territory near $63.

The USD/CAD pair gained more than 80 pips on Thursday and stayed relatively quiet around 1.2600 during the early European session on Friday. However, with the USD preserving its strength, the pair gained traction and touched a fresh five-day high of 1.2650 in the last hour. As of writing, the pair was up 0.35% on the day at 1.2643.

US T-bond yields continue to drive USD’s market valuation

The sharp upsurge witnessed in US Treasury bond yields on Thursday allowed the US Dollar Index to make a sharp U-turn in the late American session. With the 10-year benchmark 10-year US T-bond yield rising by more than 10%, the DXY closed in the positive territory above and preserved its bullish momentum on Friday. At the moment, the index is rising 0.55% at 90.63.

On the other hand, the barrel of West Texas Intermediate is losing 0.8% on the day near $63, putting additional weight on the commodity-related loonie’s shoulders.

Later in the day, the US Bureau of Economic Analysis will publish the Personal Consumption Expenditures (PCE) Price Index figures. The market consensus point to a reading of 1.4% in the annual Core PCE Price Index. A stronger-than-expected print could provide an additional boost to the greenback in the second half of the day and vice versa.

Moreover, Personal Spending, Personal Income and the University of Michigan’s Consumer Sentiment Index data from the US will be looked upon for fresh impetus. The Raw Material Prices and the Industrial Price Index figures, which are unlikely to have a significant impact on the CAD’s performance against its rivals, will be featured in the Canadian economic docket.

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