USD/CAD drops to lowest level since mid-August below 1.2550
- 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
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.
