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  • USD/CAD rebounds on Thursday after slumping to multi-month lows near 1.3300.
  • Greenback gathers strength as a safe-haven in the risk-averse atmosphere.
  • Falling crude oil prices weigh on the commodity-sensitive loonie.

The USD/CAD pair plunged to its lowest level since late February at 1.3313 on Wednesday but staged a decisive recovery on Thursday. As of writing, the pair was up 0.56% on the day at 1.3487.

WTI falls sharply

The heavy selling pressure surrounding crude oil is weighing on the CAD. On Wednesday, the weekly data published by the US Energy Information Administration (EIA) revealed that crude oil inventories in the US rose by 5.7 million barrels in the week ending June 5th to a record high of 538.1 million barrels.

Additionally, worries over a second coronavirus wave seem to be reviving concerns over a weak energy demand outlook. At the moment, the barrel of West Texas Intermediate is down 5.7% on the day at $36.85.

On the other hand, the dismal market mood on Thursday is helping the USD recover the losses it suffered on the FOMC’s dovish outlook. The US Dollar Index, which slumped to its lowest level since early March at 95.72, was last up 0.35% on a daily basis at 96.38.

The US Department of Labor announced on Thursday that the Initial Jobless Claims were at 1.54 million last week. This reading was largely in line with analysts’ estimates and failed to trigger a market reaction.

There won’t be any other macroeconomic data releases in the remainder of the day and the USD’s market valuation is likely to continue to drive the pair’s movements.

Technical levels to watch for

 

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