USD/CAD drops to fresh daily lows near 1.2070 on renewed USD weakness
- USD/CAD broke below its daily trading range during the American session.
- US Dollar Index retreats toward 90.00 area after latest US data.
- WTI climbs above $70 following Wednesday's modest decline.
After spending the majority of the day in a very tight range around 1.2100, the USD/CAD pair lost its traction during the American trading hours and dropped to a daily low of 1.2068. As of writing, the pair was down 0.25% on the day at 1.2076.
Risk flows hurt USD
The data published by the US Bureau of Labor Statistics revealed on Thursday that annual inflation, as measured by the Consumer Price Index (CPI), rose to 5% in May from 4.2% in April. This reading came in higher than analysts' estimate of 4.7%. Additionally, the US Department of Labor reported that Initial Jobless Claims declined to 376,000 last week, compared to the market expectation of 370,000.
Although the initial market reaction allowed the greenback to preserve its strength against its rivals, the positive shift seen in the market sentiment made it difficult for the currency to continue to find demand.
With the S&P 500 opening decisively higher and notching a new all-time high, the US Dollar Index turned south and was last seen losing 0.08% on the day at 90.06.
On the other hand, the barrel of West Texas Intermediate (WTI) is up 0.6% on the day at $70.15, helping the commodity-sensitive loonie outperform its rivals and causing USD/CAD to stay in the negative territory.
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.
