- US Dollar Index erases majority of Friday’s gains.
- WTI extends recovery, gains more than 6% on improving market sentiment.
- Coming up: Retail Sales data from Canada, Existing Home Sales data from US.
Pressured by the recovering crude oil prices and softening USD demand, the USD/CAD pair fell all the way down to 1.4150 on Friday. However, the pair staged a rebound ahead of the American session and was last seen trading at 1.4302, still erasing 1.45% on a daily basis.
DXY rally loses steam on Friday
The broad-based USD strength amid worries over a shortage in funding markets allowed the US Dollar Index (DXY) to advance to its highest level in more than three years 102.99 on Thursday. However, with the Fed taking drastic measures to provide USD liquidity, the DXY reversed its direction and allowed the pair to start correcting its rally on Friday.
After testing the 101 handle, the DXY recovered to 102 area to limit the pair’s losses but was still down 0.9% on the day.
On the other hand, improving market sentiment on major central banks’ and economies’ coordinated measures to negate the impact of the coronavirus outbreak on the global economy helped the risk-sensitive crude oil retrace a portion of its relentless drop.
With the barrel of West Texas Intermediate (WTI) adding 6.6% on top of Thursday’s gain of 11.73% and trading near $26.70, the commodity-related CAD stays resilient against its rivals.
In the second half of the day, Retail Sales data from Canada and Existing Home Sales data from the US will be looked upon for fresh impetus.
Technical levels to watch for
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