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USD/CAD pulls away from daily highs, stays above 1.3400 on crude oil selloff

  • WTI erases more than 8% on Friday, sumps to fresh multi-year lows.
  • OPEC+ fails to agree on additional output cuts or an extension.
  • Broad-based USD weakness despite upbeat NFP data caps pair’s gains.

The USD/CAD pair, once again, ignored the heavy selling pressure surrounding the USD and edged higher on Friday as the plummeting crude oil prices made it difficult for the commodity-sensitive CAD to find demand. As of writing, the pair was trading at 1.3420, a little below the daily high that it set at 1.3439 during the American session, adding 0.12% on the day.

At the highly-anticipated meeting in Vienna on Friday, OPEC and non-OPEC oil producers have failed to reach agreement on additional output cuts or an extension to existing production curbs to trigger a fresh oil selloff. The barrel of West Texas Intermediate was last seen trading at its lowest level since August of 2016 at $42.10, erasing 8.5% on the day.

USD struggles to capitalize on NFP data

On the other hand, the 10-year US Treasury bond yield fell to new all-time lows by erasing more than 20% on Friday and didn’t allow the greenback to find demand despite the upbeat labour market data.

In February, Nonfarm Payrolls in the US increased by 273K to beat the market expectation of 175K by a wide margin and the Unemployment Rate fell to 3.5%. Nevertheless, the US Dollar Index (DXY) broke below the 96 mark and fell to its lowest level in nearly a year at 95.71 before rebounding modestly. At the moment, the DXY is down 0.63% on the day at 96 and is erasing more than 2% for the week.

Technical levels to watch for

 

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