- USD/CAD holds the lower ground, with 1.2600 at risk once again.
- BOC revised up its economic forecasts, WTI retests the $65 mark.
- Focus on US weekly jobless claims, BOC Schembri’s and President Biden’s speech.
The buying interest around the Canadian dollar remains intact, keeping USD/CAD on the defensive around the 1.2600 level, as the focus shifts towards the US weekly jobless claims and President Joe Biden’s speech for further impetus.
USD/CAD extends its downward spiral into a fifth day on Thursday, mainly undermined by the recent surge in WTI prices and the Bank of Canada’s (BOC) upbeat outlook on the economy.
The BOC maintained the interest rates at a record low of 0.25% while keeping the current pace its bond-buying on Wednesday. However, on the economy, the central bank said, “GDP growth in the first quarter of 2021 is now expected to be positive, rather than the contraction forecast in January.”
Meanwhile, oil prices continue to benefit from expectations of faster global economic growth, driven by massive stimulus and successful vaccine campaigns.
Also, a drawdown in the US crude stockpiles aided the rally in the WTI barrel. Note Canada is heavily dependent on oil exports for its revenues and therefore, a surge in oil prices renders supportive for the Loonie.
On the US dollar-side of the story, the retreat in the US Treasury yields and therefore, the greenback continues to exert the downward pressure on the spot.
The retracement in the US rates from yearly highs could be attributed to the fears about the overheating of the economy. Softening price pressure in the US also added to the weight on the dollar alongside the yields.
USD/CAD: Technical levels
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