USD/CAD rises above 1.33 as WTI’s daily losses surpass 3%

• WTI drops below $52 for the first time in 10 days.
• Negative market sentiment weighs on commodities on Thursday.
• US Dollar Index stays quiet around mid-96s.

The USD/CAD pair advanced to its highest level since January 25 at 1.3319 as the commodity-related loonie met a renewed selling pressure amid the sharp drop seen in crude oil prices. As of writing, the pair was up 0.7% on the day a little below  1.3300.

Resurfacing concerns over the slowdown in the global economic growth today weighed on the market sentiment and hurt the demand for risk-sensitive commodities. Additionally, reports of U.S. President Trump not planning to meet his Chinese counterpart Xi before the March deadline reminded investors of the potential negative impact of the U.S. – China trade conflict on the oil demand outlook. At the moment, the barrel of West Texas Intermediate is losing nearly 3% on the day at $52.25.

Meanwhile, the dominating risk-off mood ramped up the demand for safe US Treasury Bonds and drove their yields lower to pull the US Dollar Index away from its daily highs, which keeps the pair’s gains capped for the moment. Nevertheless, the DXY remains on track to close the day modestly higher near 96.50.

On Friday, Statistics Canada will publish the employment data. Previewing the event, “We also look for a recovery in private sector job growth following last month’s rotation into self-employment. Job growth of 15k should leave the unemployment rate unchanged at the current cycle low of 5.6% while wage growth should firm modestly to 1.7% y/y, still well below levels associated with a tight labour market,” said TD Securities analysts in a recently published report.

Key technical levels