USD/CAD continues to consolidate Wednesday's losses near 1.3170

The USD/CAD pair lost 60 pips on Wednesday after the greenback came under strong selling pressure amid Federal Open Market Committee (FOMC) Chairman Jerome Powell's dovish comments. With the market action turning subdues in the absence of significant macroeconomic drivers on Thursday, the pair has gone into a consolidation phase and was last seen moving sideways near 1.3170, where it closed the previous day.

Powell's remarks hurt USD

Although the FOMC kept its policy rate unchanged within the target range of 1.5% - 1.75% as expected, Powell made it clear that he would have to see a "significant and persistent" move up in inflation to consider a rate hike to weigh on the greenback. 

Reviewing the FOMC event, "our base case remains that the Fed will deliver a fourth cut some time during the spring, which is, however, not a high conviction call," said Danske Bank analysts. "Here we probably diverge from consensus amongst Fed watchers and are more aligned with market pricing (a full cut is priced in next year).”

Ahead of the Producer Price Index (PPI) and the weekly Jobless Claims data from the United States, the US Dollar Index is up 0.12% on the day at 97.20.

On the other hand, the barrel of West Texas Intermediate is posting modest daily gains above the $59 mark and helping the CAD stay resilient against the USD. The International Energy Agency (IEA) in its monthly report on Thursday revealed that the global oil demand rose by 900,000 barrels per day on a yearly basis in the third quarter of 2019 to register the highest annual growth in a year. 

Technical levels to watch for