fxs_header_sponsor_anchor

News

USD/CAD rebounds above 1.4200 following sharp drop caused by oil rally

  • US Dollar Index climbs to weekly highs above 100.30.
  • WTI spikes above $27 on hopes of Russia and Saudi Arabia reducing oil output.
  • Initial Jobless Claims in US jumped to new all-time high above 6 million.

The USD/CAD pair rose to a fresh daily high of 1.4300 during the early trading hours on the back of broad-based USD strength but made a sharp U-turn to drop all the way to 1.4080 as surging crude oil prices boosted the demand for the loonie.

However, with the oil rally losing its steam and the greenback outperforming its rivals, the pair erased its losses and was last seen trading at 1.4210, up 0.15% on a daily basis.

Oil rally fades

US President Trump said on Thursday that he spoke to Saudi Arabia's Crown Prince and Russian President Putin and added that he was expecting an oil output reduction of approximately 10 million barrels. Although the barrel of West Texas Intermediate (WTI) spiked above $27 with the initial reaction, lack of an official announcement forced the WTI to erase a portion of its gains.

Reuters reported that there was no set date for an emergency meeting between OPEC and non-OPEC producers yet and a senior Trump administration official noted that the US did not know the former details of oil output cuts. As of writing, the WTI was trading at $23.90, adding 13% on the day.

On the other hand, the data published by the US Department of Labor revealed that Initial Jobless Claims were 6.6 million during the week ending March 28th. Following this data release, the US Dollar Index (DXY) gained traction during the American session and broke above the 100 handle to help the pair erase its losses. At the moment, the DXY is up 0.9% on the day at 100.40.

Technical levels to watch for

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.