- A sharp pullback in Oil prices undermined Loonie and helped gain some positive traction.
- Fed rate cut bets kept the USD bulls on the defensive, albeit did little to hinder the uptick.
- Friday’s key focus will be on the closely watched monthly jobs report from the US and Canada.
The USD/CAD pair gained some positive traction on the last trading day of the week and recovered the previous session’s downtick to 8-1/2 month lows.
The US Dollar remained on the defensive in the wake of firming market expectations that the Fed will eventually cut interest rates later in July, which was evident from the ongoing slide in the US Treasury bond yields to fresh multi-year lows.
However, a sharp pullback in Crude Oil prices – now down over 1.25% for the day, undermined demand for the commodity-linked currency and turned out to be the only factor behind the pair’s modest rebound from the lowest level since late-Oct. 2018.
Despite heightened geopolitical tensions in the Middle East due to the seizure of an Iranian oil tanker by British Royal Marines, Oil prices were weighed down by concerns over global economic growth and weakening demand amid persistent trade tensions.
The pair has now recovered further beyond mid-1.3000s and was further supported by some short-covering move ahead of Friday’s key releases – the closely watched monthly jobs report from the US (NFP) and Canada, due later during the early North-American session.
Technical levels to watch