- 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.
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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0700 after Germany and EU PMI data
EUR/USD gains traction and rises toward 1.0700 in the European session on Monday. HCOB Composite PMI data from Germany and the Eurozone came in better than expected, providing a boost to the Euro. Focus shifts US PMI readings.
GBP/USD holds above 1.2350 after UK PMIs
GBP/USD clings to modest daily gains above 1.2350 in the European session on Tuesday. The data from the UK showed that the private sector continued to grow at an accelerating pace in April, helping Pound Sterling gather strength.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.