- USD/CAD lost its traction after climbing above 1.3400.
- WTI stays relatively calm below $40 on Thursday.
- US Dollar Index clings to modest daily gains ahead of mid-tier US data.
The USD/CAD pair rose to its highest level since August 4th at 1.3414 on Thursday but struggled to preserve its bullish momentum in the absence of significant fundamental drivers. As of writing, the pair was up 0.1% on the day at 1.3399.
USD continues to outperform its rivals
The broad-based USD strength and the uninspiring performance of crude oil prices on Wednesday allowed USD/CAD to gain more than 80 pips.
The barrel of West Texas Intermediate (WTI) closed modestly lower near mid-$39s after climbing to $40.70 on Wednesday and is trading in a tight range below $40 on Thursday, failing to provide a directional clue to the commodity-sensitive loonie.
On the other hand, the US Dollar Index (DXY), which closed the previous four trading days in the positive territory, edged higher on Thursday but seems to be struggling to hold above 94.50. Ahead of the weekly Initial Jobless, New Home Sales and Kansas Fed Manufacturing Activity data from the US, the DXY is up 0.1% on the day at 94.45.
There won’t be any macroeconomic data release featured in the Canadian economic docket in the remainder of the week and the USD’s market valuation is likely to continue to impact USD/CAD’s movements if WTI extends consolidation near $40.
Technical levels to watch for
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