USD/CAD pulls away from yearly highs, trades near 1.34

Crude oil sell-off weighs on the loonie on Friday.
BoC's Poloz adopts a dovish tone.
US Dollar Index falls below 97 on disappointing data.

Eren Sengezer FXStreet

The USD/CAD pair gained traction and advanced to its highest level of the year at 1.3440 on Thursday as the commodity-sensitive loonie struggled to find demand amid falling crude oil prices. With the greenback losing strength in the second half of the day, the pair retreated from highs and was last seen trading at 1.3400, adding 0.3% on a daily basis.

Today's OPEC meeting didn't produce the expected headlines as members failed to reach an agreement on additional output cuts for 2019. The barrel of West Texas Intermediate came within a touching distance of the critical $50 mark before rebounding modestly. At the moment, the WTI is down 3.5% on the day at $51. Talks on output cuts are expected to continue on Friday and according to Saudi Arabia's energy minister, the baseline scenario is for a cut of one million barrels per day, however, it's still unclear if Russia will be on board with this change.

Meanwhile, in his prepared remarks delivered at the Chartered Financial Analyst Society Breakfast Seminar in Toronto, the Bank of Canada's Governor Stephen Poloz said that the current level of the rates was appropriate for the 'time-being' to reaffirm the bank's cautious tone revealed in yesterday's monetary policy statement. "The main risk to the outlook is trade tensions between the U.S. and other nations, says containing inflation risks would be paramount in an outright trade war," Poloz added.

On the other hand, the disappointing ADP employment report ahead of tomorrow's critical NFP data weighed on the greenback on Thursday to help the pair limit its losses. As of writing, the DXY was down 0.35% on the day at 96.67.

US: Private sector employment increased by 179,000 in November vs 195K expected.
US: International trade deficit rose to $55.5 bln vs $55 bln expected.
US: Markit Services PMI comes in at 54.7 in November (final) vs 54.4 expected.
US: ISM non-manufacturing PMI improves to 60.7 in November vs 59.2 expected.

Technical levels to consider

The pair could face the first resistance at 1.3445/55 (daily high/Jun. 12, 2017 high) ahead of 1.3500 (psychological level) and 1.3550 (Jun. 2917 high). On the downside, supports are located at 1.3365 (daily low), 1.3250 (Dec. 5 low) and 1.3165 (Dec. 4 high).

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.

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.