- USD/CAD dropped to a fresh weekly low below 1.2540 on Wednesday.
- US Dollar Index drops toward 93.00 during American session.
- Canadian economy grew more than expected in January.
The USD/CAD pair stayed relatively quiet around 1.2600 during the first half of the day but came under strong bearish pressure in the early trading hours of the American session on Thursday. After dropping to its lowest level in a week at 1.2537, however, the pair staged a modest rebound and was last seen losing 0.54% on a daily basis at 1.2566.
DXY retreats toward 93.00
The broad-based USD weakness and renewed CAD interest on the back of strong data weighed heavily on USD/CAD on Thursday.
The positive shift witnessed in the market mood weighed on the greenback on Thursday. With Wall Street’s main indexes opening the day higher, the US Dollar Index (DXY) extended its daily slide and briefly dropped below 93.00. As of writing, the DXY was losing 0.2% at 93.11.
In its monthly report, the Automatic Data Processing (ADP) Research Institute announced that the private sector employment increased by 517,000 in March. This reading fell short of the market expectation of 550,000 and failed to help the USD gather strength.
On the other hand, the data published by Statistics Canada showed on Wednesday that the real Gross Domestic Product (GDP) in January grew by 0.5%, compared to analysts’ estimate for an expansion of 0.5%. The upbeat growth data helped the loonie outperform its rivals.
Later in the session, US President Joe Biden will be unveiling his infrastructure plan that will reportedly contain $2 trillion worth of investment over eight years.
Technical levels to watch for
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