- USD/CAD looks to build on Wednesday’s rally.
- Dollar strength, oil price-weakness remain supportive.
- Focus shifts to the US macro news, Day 3 of Powell’s testimony.
The USD/CAD pair extends its bullish consolidative mode just shy of the 1.3400 level so far in Thursday’s Asian trading, taking cues from the US dollar price action.
The spot refreshed six-week highs at 1.3394 in early trades, courtesy of the renewed weakness in oil prices. WTI hit fresh session lows at $39.13, as oil demand concerns returned to the fore amid a faltering economic recovery in the US and Europe.
The coronavirus resurgence has cast a shadow on the post-pandemic nascent recovery world-wide, especially after new restrictions and localized lockdowns reimposed in the UK and Europe. Therefore, investors scurried for safety in the US dollar, fuelling its haven demand across the board.
The resource-linked Loonie remains undermined by the oil-price weakness while persistent US dollar strength helps keep the buoyant tone intact around the major. The US dollar index sits at the highest levels in eight weeks near 94.40.
Attention now turns towards the US Jobless Claims and Housing data for fresh trading impetus. The US dollar dynamics and broader market sentiment will remain the key drivers behind the pair’s price action.
Also, of note remains the third day of the US Federal Reserve (Fed) Chair Jerome Powell’s testimony after he pushed for fiscal stimulus a day before. Powell is due to testify on the CARES Act before the Senate Banking Committee later on Thursday.