USD/CAD eases below 1.35 as greenback finally starts correcting its two-day upsurge
- US Dollar Index pulls away after refreshing multi-month highs above 98.
- Durable goods orders in the U.S. rose more than expected in March.
- WTI stays in a consolidation phase below $66.
After rising more than 150 pips in the previous two trading days and advancing above the 1.35 mark yesterday for the first time since the first week of January, the USD/CAD pair started to pull away from its highs in the NA session and erased its daily gains to turn flat on the day near 1.3490.
Although the initial reaction to today's data from the U.S. triggered yet another USD buying wave and lifted the US Dollar Index to its highest since May 2017 at 98.32, the greenback finally came under modest pressure in the last couple of hours, suggesting that the currency has started to correct its latest rally. At the moment, the DXY is unchanged on the daily chart at 98.06.
The U.S. Census Bureau today reported that, according to its advanced estimate, durable goods orders in March increased by 2.7% following February's 1.1% drop and beat the market expectation for a growth of 0.8% by a wide margin. Other data from the U.S. showed that initial jobless claims, which fell to its lowest level since 1969 at 193K last week, rose to 230K to come in worse than the analysts' estimate of 200K.
Meanwhile, despite the weakening greenback, the pair struggles to gather bearish momentum as the downbeat tone surrounding crude oil makes it difficult for the commodity-sensitive loonie to find demand. Hurt by expectations of Saudi Arabia boosting its oil production to counter any negative impact of the U.S. sanction on Iran oil exports on the global supply weighed on the West Texas Intermediate prices this week and caused it to drop below $66 per barrel. At the moment, the WTI is posting small losses on the day near $65.65.
Technical levels to consider
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.
