USD/CAD renews six-week highs above 1.2300 ahead of mid-tier data

After rising sharply during the American trading hours and closing in the positive territory on Wednesday, the USD/CAD pair preserved its bullish momentum and climbed to its highest level since early May at 1.2346 on Thursday. As of writing, the pair was up 0.5% on a daily basis at 1.2335.

DXY continues to push higher toward 92.00

The unabated USD strength remains the primary market theme following the hawkish shift seen in the FOMC's policy outlook. In its updates Summary of Economic Projections, the so-called dot plot, the Fed revealed that the number of policymakers who expect a lift-off in policy rate from zero in 2023 rose to 13 from seven in March. 

During the press conference, FOMC Chairman Jerome Powell adopted a more cautious tone with regards to the inflation outlook and said that they are not dismissing the possibility that inflation will stay high for longer than they forecast. 

The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, gained nearly 1% on a daily basis and extended its rally on Thursday. Currently, the DXY is at its highest level in two months at 91.78, rising 0.43% on the day.

Later in the session, the ADP Employment Change for May will be featured in the Canadian economic docket. The weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Index from the US will be looked upon for fresh impetus as well.

Meanwhile, the barrel of West Texas Intermediate is posting small daily gains around $72, possibly helping the commodity-related loonie limit its losses for the time being. 

Technical levels to watch for