USD/CAD rises toward 1.3200, oil rally caps gains
- WTI adds more than 1% on Thursday on renewed trade optimism.
- US Dollar Index erases large part of Wednesday's losses.
- Coming up: BoC Governor Poloz speech 17:45 GMT.
After spending a large portion of the day moving sideways near the 1.3170 mark, the USD/CAD pair gained traction during the American trading hours and rose toward the 1.3200 handle before losing its momentum. As of writing, the pair was up 0.08% on the day at 1.3182.
Trade headlines dominate markets
A Wall Street Journal report that claimed that the US was planning to cut existing tariffs on $360 billion worth of Chinese imports by 50% allowed market sentiment to turn positive on the day. Additionally, US President Trump tweeted out that they were "very close" to a big trade deal with China.
The 10-year US Treasury bond yield rallied on these developments and helped the greenback gather strength after the currency suffered heavy losses against its major rivals on FOMC Chairman Powell's dovish remarks on Wednesday. The US Dollar Index was last seen adding 0.25% on the day at 97.38.
On the other hand, crude oil prices pushed higher on hopes of global energy demand improving with an end to the US-China trade conflict and helped the commodity-sensitive CAD stay resilient against the buck. At the moment, the barrel of West Texas Intermediate is adding 1.1% on a daily basis at $59.40.
At 17:45 GMT, Bank of Canada Governor Stephen Poloz will deliver his speech titled 'Seeing the Big Picture with 2020 Vision' before the Empire Club of Canada. There won't be any macroeconomic data releases from Canada on Friday and investors are likely to continue to react to trade headlines.
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.
