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  • Markit’s Manufacturing PMI for Canada drops to 50.4 in December.
  • US Dollar Index climbs above 96.80 on Thursday.
  • Crude oil continues to correct December rally, WTI trades below $61.

After failing to break above the 1.3000 mark during the European trading hours on Thursday, the USD/CAD pair dropped to a session low of 1.2974. However, with the USD preserving its strength in the second half of the day and the CAD feeling the weight of falling crude oil prices and the disappointing PMI data from Canada, the pair, once again, rebounded and was last seen adding 0.08% on the day at 1.2997.

The Markit Manufacturing PMI in Canada dropped to 50.4 in December from 51.4 in November and fell short of analysts’ estimate of 51.9 to show that the economic activity in the manufacturing sector expanded at a softer pace than expected.

Additionally, following December’s impressive rally, crude oil prices started the new year on the back foot with the barrel of West Texas Intermediate dropping below the $61 handle and erasing nearly 1% on Thursday to help the pair stay in the positive territory.

USD kicks off 2020 on a strong note

On the other hand, after posting losses for six straight days, the US Dollar Index finally staged a decisive recovery on Thursday and retraced almost all the losses it suffered this week. As of writing, the index was up 0.45% on the day at 96.87. Today’s data from the US showed that weekly Initial Jobless Claims came in at 222K for the week ending December 27th to better the market expectation of 225K and the Markit Manufacturing PMI was 52.4 in December’s final reading. 

The ISM Manufacturing PMI will be featured in the US economic docket on Friday. The FOMC will release the minutes of its December meeting as well.

Technical levels to watch for