USD/CAD extends rebound, trades at fresh 3-day high above 1.2660
- USD/CAD preserves its bullish momentum in the second half of the day.
- US Dollar Index stays in the positive territory above 93.00.
- WTI stays relatively quiet after posting gains in the previous three days.
The USD/CAD pair spent the European trading hours moving sideways a little above 1.2600 but started to edge higher in the second half of the day. As of writing, the pair was trading at a three-day high of 1.2666, rising 0.6% on a daily basis.
DXY looks to snap four-day losing streak
The renewed USD strength on the back of hawkish Fed commentary on Thursday seems to be providing a boost to USD/CAD. The US Dollar Index, which closed the previous four trading days in the negative territory, was last seen rising 0.25% on the day at 93.05.
Earlier in the day, Kansas City Fed President Esther George noted that the current outlook suggests that the Fed could start adjusting purchases this year. On a similar note, Dallas Fed President Robert Kaplan said September could be a good time to announce the plan for tapering. Additionally, St. Louis Fed President James Bullard reiterated that he would want asset tapering to be completed by the first quarter of 2022.
In the meantime, the US Bureau of Economic Analysis announced that it revised the annualized Real GDP growth to 6.6% for the second quarter from 6.5%. Finally, the weekly Initial Jobless Claims rose by 4,000 to 353,000.
On the other hand, the barrel of West Texas Intermediate is trading in a relatively tight range around $68, allowing the USD's market valuation to drive USD/CAD's action.
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.
