- USD/CAD broke below its weekly range on Thursday.
- US Dollar Index slumps below 92.30 in the American session.
- Crude oil stages decisive rebound, trades above $70.
The USD/CAD pair came under strong bearish pressure in the second half of the day on Thursday and dropped to its lowest level since August 16 1.2549. As of writing, the pair was down 0.5% on a daily basis at 1.2555.
WTI jumps above $70 on Thursday
The unabated USD selloff and rising crude oil prices weigh heavily on USD/CAD. After Wall Street's main indexes opened in the positive territory, the greenback struggled to find demand as a safe haven and the US Dollar Index was last seen trading at its weakest level in four weeks at 92.26, losing 0.25% on the day.
Supported by risk flows, the barrel of West Texas Intermediate is rising nearly 3% at $70.22, providing a boost to the commodity-sensitive loonie.
Earlier in the day, the data from Canada showed that the international trade surplus narrowed to $C0.78 billion from $C2.56 billion but this report was largely ignored by market participants.
On the other hand, the US Department of Labor reported that the Initial Jobless Claims declined to 340,000 in the week ending August 28 from 354,000.
On Friday, the US Bureau of Labor Statistics will release the Nonfarm Payroll (NFP) data for August. The ISM's August Services PMI will be featured in the US economic docket as well.
Technical levels to watch for
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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