- WTI erases small part of this week’s gains, stays above $60.
- US Dollar Index edges lower, looks to close below 97.
The USD/CAD pair staged a modest rebound from the 2019-low that it set at 1.3016 earlier today and edged higher toward the mid-1.30s. With the trading action turning subdued in the American trading hours, the pair struggled to preserve its recovery momentum and was last seen trading at 1.3040, down 0.25% on the day.
The fact that the greenback struggled to extend its rally that started last Friday on the back of upbeat employment data this week allowed the pair to turn south. The US Dollar Index, which rose to a multi-week high of 97.60 earlier this week, dropped below 97 following FOMC Chairman Powell’s cautious remarks. Although the index recovered a small portion of its losses after yesterday’s data showed the core Consumer Price Index ticked up to 2.1%, it failed to hold above 97 today and was last seen at 96.90.
On the other hand, the heightened geopolitical tensions in the Middle East and a much bigger draw in the U.S. crude oil inventories supported crude oil prices this week. The barrel of West Texas Intermediate rose above $60 for the first time since late May and provided a boost to the commodity-sensitive loonie.
Meanwhile, the Bank of Canada adopted a balanced tone in its policy statement after announcing that it kept its policy unchanged at 1.75% this Wednesday to further support the CAD.
Technical levels to watch for