USD/CAD continues to trade above 1.33 despite USD weakness
|- Concerns over a global economic slowdown weighs on crude oil prices.
- West Texas Intermediate (WTI) trades below $52 on Thursday.
- US Dollar Index stays under pressure following the dismal macroeconomic data.
After climbing to its highest level in a month at 1.3348 on Thursday, the USD/CAD pair turned south during the American trading hours and retraced its daily rally. As of writing, the pair was virtually unchanged on the day at 1.3320.
Earlier in the day, the data published by the Institue for Supply Management (ISM) revealed that the business activity in the service sector in the United States (US) expanded at a much softer pace in September than it did in August with the Non-Manufacturing Purchasing Managers' Index (PMI) sliding to 52.6 from 56.4 in August.
Although the disappointing data put the Greenback under heavy selling pressure and forced the US Dollar Index slump to 98.70 area, the fact that it also caused global recession fears to escalate weighed on crude oil prices and made it difficult for the commodity-sensitive Loonie to outperform the USD.
Falling crude oil prices hurt the CAD
The barrel of West Texas Intermediate (WTI), which closed the previous seven trading days in the negative territory, pushed lower amid concerns over the potential negative impact of a global economic slowdown on the energy demand outlook and dropped to its lowest level since the first week of August at $50.97. As of writing, the WTI was down 0.8% on the day at $51.90.
On Friday, nonfarm payrolls (NFP) data from the US will be watched closely by the market participants. A reading below the market expectation of 145,000 could bring a fresh USD-selling wave as it's likely to cause investors to start pricing another 25 basis points Federal Reserve rate cut in October.
Technical levels to consider
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