USD/CAD looks to snap 3-day winning streak amid surging oil prices
- U.S. says Iran is behind tanker attacks in Oman Gulf.
- WTI looks to settle more than 2% higher.
- US Dollar Index posts modest gains near the 97 handle.
The USD/CAD pair came under pressure on Thursday with the rising crude oil prices helping the commodity-sensitive loonie outperform its major rivals. After dropping to a daily low of 1.3298 in the early North American session, however, the pair started to consolidate its daily losses and was last seen trading at 1.3325, losing 0.15% on a daily basis.
Heightened tensions in the Middle East following the reports of oil tankers getting attacked in the Gulf of Oman revived concerns over supply disruptions and provided a boost to crude oil prices on Thursday. After losing nearly 4% yesterday, the barrel of West Texas Intermediate rose to a daily high of $53.43 today to erase all of its recent losses. Although the WTI eased from its highs, it was still on track to settle near $52.30 with a daily gain of more-than-2%.
Commenting on these developments, the U.S. Secretary of State, Mike Pompeo, said that he came to the conclusion that Iran was responsible for today's attacks. "Iran is working to disrupt the flow of oil through the Strait of Hormuz," Pompeo said.
On the other hand, the US Dollar Index largely ignored today's macroeconomic data releases from the U.S. and fluctuated in a tight range near the 97 handle to leave the pair at the mercy of crude oil prices. The UoM Consumer Sentiment Index and Retail Sales will be featured in the U.S. economic docket on Friday.
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.
