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  • WTI erases portion of early losses, trades above $53.
  • US Dollar Index drops below 99.30 after dismal PMI data.
  • Retail Sales in Canada stayed unchanged in December.

The heavy selling pressure surrounding the greenback and a modest rebound seen in crude oil prices caused the USD/CAD pair to slide toward the 1.3200 handle on Friday. As of writing, the pair was down 0.35% on a daily basis at 1.3213 and was looking to close the second straight week in the negative territory.

Earlier in the day, the data published by Statistics Canada showed Retail Sales in December stayed unchanged after rising 1.1% in November and fell short of the market expectation for an increase of 0.1%. 

USD weakens after dismal PMI data

However, with the preliminary February PMI data from the US coming in much worse than expected, the USD selloff intensified and allowed the CAD to outperform the USD. 

The IHS Markit’s Manufacturing PMI in February slumped to 50.8 from 51.9 and the Services PMI dropped to 49.4 to show contraction in the service sector’s economic activity for the first time in four years. The US Dollar Index, which touched its highest level since April 2017 at 99.91 on Thursday, fell sharply during the American trading hours and was last seen down 0.6% on the day at 99.28.

Meanwhile, the West Texas Intermediate (WTI) staged a modest rebound after Saudi Arabia’s energy minister denied The Wall Street Journal report claiming that Saudi Arabia was considering to break the OPEC+ alliance with Russia and helped the commodity-related CAD preserve its strength. At the moment, the barrel of WTI is trading at $53.40, still down 0.55% on the day.

Technical levels to watch for