- BoC’s optimistic view of the domestic economy continues to underpin the CAD.
- A modest pullback in oil prices seemed largely offset by a subdued USD demand.
- The market attention now shifts to OPEC+ meeting and second-tier economic data.
The USD/CAD pair added to the previous session's post-BoC losses and dropped to near one-month lows, around the 1.3180-75 region in the last hour.
The pair extended this week's rejection slide from a resistance marked by a six-month-old descending trend-line and witnessed some follow-through selling for the third consecutive session on Thursday.
The Canadian dollar remained well supported by Wednesday's BoC policy statement, which reflected the central bank's optimistic view on the domestic economy and dampened prospects for immediate easing.
This coupled with a goodish intraday rally in crude oil prices, supported by a larger than expected drop in the US inventories, provided an additional boost to the commodity-linked currency – loonie.
The pair tumbled over 100 pips and continued losing some ground through the early European session on Thursday, rather unaffected by a modest pullback in oil prices ahead of the key OPEC+ meeting.
The prevalent US dollar selling bias – weighed down by a duo of disappointing US macro releases on Wednesday – was seen as one of the key factors prompting some follow-through selling on Thursday.
Even the latest trade optimism, led by a Bloomberg report that the US and China are moving closer to a deal before the 15 December tariffs deadline, also did little to provide any meaningful boost to the greenback.
Moving ahead, market participants now look forward to the economic docket, featuring some second-tier releases from Canada and the US, for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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