USD/CAD continues its winning streak on lower Crude oil prices, improves to near 1.3580

USD/CAD continues its winning streak, marking the fifth consecutive session with gains, as it edges higher around 1.3580 during the Asian session on Thursday. The Canadian Dollar (CAD) faced downward pressure against the US Dollar (USD) due to the lower Crude oil prices, thereby providing support to the USD/CAD pair. Furthermore, Canada’s Gross Domestic Product data will be closely monitored later in the North American session.

West Texas Intermediate (WTI) oil price struggles to recover from intraday losses and trades higher near $78.10 per barrel at the time of writing. However, Crude oil prices encountered challenges as expectations for the Federal Reserve (Fed) to delay the first-rate cuts emerged. Additionally, the higher API Weekly Crude Oil Stock added to the downward pressure on oil prices.

In December 2023, Canada’s average weekly earnings of non-farm payroll employees increased by 3.8% YoY, showing a slight deceleration from the revised 3.9% growth recorded in November 2023. Additionally, the country's Current Account deficit narrowed to CAD 1.62 billion in the fourth quarter of 2023, against the previous reading of CAD 4.74 billion but it was slightly above market expectations of a CAD 1.25 billion deficit.

The recent Gross Domestic Product (GDP) data from the United States (US) has prompted financial markets to postpone expectations for the Federal Reserve’s (Fed) first rate cut. This has lent some support to the US Dollar (USD), bolstering the USD/CAD pair.

The preliminary US Gross Domestic Product Annualized expanded by 3.2% in the fourth quarter of 2023, slightly below market expectations of remaining steady at 3.3%. Additionally, the preliminary US Gross Domestic Product Price Index (Q4) increased by 1.7%, surpassing both expected and previous rises of 1.5%.

The US Dollar Index (DXY) maintains stability amid higher US Treasury yields. Furthermore, US Federal Reserve speakers have expressed a cautious stance, indicating potential rate cuts later in the year. This has led to a diminished likelihood of rate cuts in upcoming meetings, providing upward support for the Greenback. Traders await the release of key US Personal Consumption Expenditures - Price Index data, which could potentially influence the Federal Reserve's monetary policy stance.