USD/CAD drops below 1.2600, falling crude oil prices limit losses
- USD/CAD is trading with modest losses below 1.2600.
- WTI pares daily gains, turns flat below $65.
- US Dollar Index stays deep in the negative territory near 91.50.
After rising toward 1.2700 on Wednesday, the USD/CAD pair reversed its course and closed in the negative territory at 1.2617. With the USD struggling to find demand on Thursday, the pair extended its slide and was last seen losing 0.27% on the day at 1.2583.
Falling T-bond yields weigh on USD
The USD's market valuation remains the primary driver of USD/CAD's movements in the second half of the week. Pressured by the sharp decline witnessed in the US Treasury bond yields, the US Dollar Index is losing 0.3% at 91.55. Later in the session, the weekly Initial Jobless Claims and JOLTS Job Openings for January data from the US will be looked upon for fresh impetus.
On the other hand, the poor performance of crude oil prices keeps the commodity-related CAD's gains limited for the time being. Earlier in the day, the barrel of West Texas Intermediate rose to a daily high of $65.60 but lost its traction and turned flat on the day near $64.80.
Meanwhile, the Bank of Canada (BoC) decided to keep its policy rate unchanged at 0.25% as expected on Wednesday and failed to trigger a noticeable market reaction. Lawrence Schembri, Deputy Governor of the Bank of Canada, is scheduled to deliver a speech at 1830 GMT. On Friday, the Canadian labour market report will be the last significant data release of the week.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
