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  • Crude oil prices rebound on Wednesday on renewed trade optimism.
  • US Dollar Index moves sideways around the 99 handle.
  • Coming up: The Federal Open Market Committee (FOMC) will release September meeting minutes.  

The USD/CAD pair came under modest selling pressure on Wednesday as recovering crude oil prices helped the commodity-sensitive Loonie gather strength against its major rivals. As of writing, the pair was trading at 1.3308, losing 0.12% on a daily basis.

Crude oil prices revers direction on trade optimism

Wednesday’s headlines surrounding the United States (US)-China trade dispute revived hopes of the sides reaching a deal before causing the conflict to escalate any further. The Financial Times reported that China was ramping up agricultural imports from the United States with an aim to ease the tension ahead of Thursday’s high-level negotiations and Bloomberg claimed that China was ready to make an interim deal despite White House’s blacklisting of Chinese technology firms.

The improved market sentiment also helped crude oil prices to start recovering this week’s losses. The barrel of West Texas Intermediate (WTI), which dropped to $51.80 on Tuesday, was last seen trading at $53.10, adding 1.05% on a daily basis. Later in the session, the Energy Information Administration (EIA) will release its weekly crude oil stock report.

Meanwhile, the US Dollar Index is fluctuating in a relatively tight band near the 99 handle as investors refrain from making large bets ahead of key events.

Federal Open Market Chairman (FOMC) Jerome Powell will be delivering a speech at 15:00 GMT. Later in the US evening, the FOMC will release the minutes of its September meeting.  

Previewing this event,  “Minutes from the latest FOMC meeting will be released tonight. This will give insights into the discussion about the need for further accommodation,” noted Danske Bank analysts.

“However, the meeting took place before the recent weak US service PMI that points to some spill-over to US consumers and the service sector.”

Technical levels to watch for