USD/CAD retreats below 1.2600 in choppy session

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  • USD/CAD is struggling to make a decisive move in either direction.
  • US Dollar Index stays in the negative territory below 92.30.
  • WTI posts modest losses after closing the previous two trading days in the green.

After rising for two straight days and touching its highest level in a week at 1.2636 on Wednesday, the USD/CAD pair seems to have gone into a consolidation phase and was last seen losing 0.1% on a daily basis at 1.2595.

DXY turns south as US T-bond yields slide

On Wednesday, the greenback gathered strength against its rivals as the benchmark 10-year US Treasury bond yield rose more than 1% on the day. With the US Dollar Index (DXY) staging a rebound, USD/CAD managed to close in the positive territory.

On Thursday, however, the DXY came under renewed bearish pressure with the 10-year US T-bond yield erasing the majority of Wednesday’s gains and made it difficult for USD/CAD to continue to push higher. At the moment, the DXY is losing 0.2% at 92.23.

On the other hand, the barrel of West Texas Intermediate is posting small daily losses around $59.50, limiting USD/CAD’s downside for the time being.

Later in the session, the US Department of Labors weekly Initial Jobless Claims data will be looked upon for fresh impetus. A better-than-expected reading could provide a boost to Wall Street’s main indexes and force the USD to remain on the back foot in the second half of the day. Additionally, FOMC Chairman Jerome Powell will be delivering a speech at 1600 GMT. There won’t be any macroeconomic data releases featured in the Canadian economic docket.

Technical levels to watch for

 

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