USD/CAD erases small part of daily gains as WTI pushes above $60

• WTI gains traction and retakes $60.
• US Dollar Index clings to recovery gains above $96.
• Wholesale sales in Canada beats expectations.

After closing the previous two days in the negative territory amid broad USD weakness and crude oil rally, the USD/CAD reversed its course on Thursday and rose to its highest level of this week at 1.3355 before starting to consolidate its gains. As of writing, the pair was trading at 1.3337, adding 0.24% on a daily basis.

Boosted by a larger-than-expected draw in the U.S. crude oil inventories seen in the weekly EIA report yesterday, the barrel of West Texas Intermediate rose above $60 for the first time since November and helped the commodity-sensitive loonie gather strength against its rivals. However, with the bullish momentum surrounding commodities fading away, the currency struggled to show resilience against the greenback, which staged a decisive recovery following Wednesday’s FOMC-led sell-off. At the moment, the DXY is up 0.28% on the day at 96.20 and the WTI is trading with small daily gains near $60.

Meanwhile, today’s data from Canada showed that wholesale sales in January rose by 0.6% to beat the market expectation of 0.5% and the ADP reported that private sector employment increased by 36.2K in February.

Tomorrow’s inflation report from Canada will be the next significant catalyst for the CAD. Previewing the data, “Core inflation measures are likely to be stable to lower. We expect unchanged BoC core metrics on average (1.9%) with risks skewed to 1.8%,” said TD Securities analysts.

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