- WTI retreats toward $17, clings to strong daily gains.
- US Dollar Index looks to close near 99.
- Canadian economy is expected to contract by 2.6% in Q1.
The USD/CAD pair dropped to its lowest level since mid-March at 1.3849 on Thursday but staged a decisive rebound during the American trading hours. As of writing, the pair was up 0.38% on the day at 1.3930 and was looking to snap its three-day losing streak.
Earlier in the day, the ongoing recovery in crude oil prices helped the CAD continue to gather strength against the greenback. The barrel of West Texas Intermediate (WTI) rose to a nine-day high of $18.57 before going into a consolidation phase. At the moment, the WTI is trading near $17, gaining 12% on the day.
USD ends April on a weak note
Meanwhile, the data published by Statistics Canada revealed that the Canadian economic activity was virtually unchanged on a monthly basis in February. Moreover, the flash estimate showed that the GDP is expected to decline by 2.6% in the first quarter.
Commenting on the market reaction, “unsurprisingly, the CAD ignored the data. With month-end dynamics the primary focus this week, a stale GDP report was never going to be that interesting to follow anyway,” TD Securities analysts said. On the same note, the pair’s rebound picked up steam despite the broad USD weakness to reflect the impact of month-end flows and profit-taking on the pair.
The US Dollar Index, which tracks the USD’s performance against a basket of six major currencies, fell below the 99 handle for the first time in more than two weeks on Thursday. Although the index recovered modestly in the last hour and steadied around 99.10, it’s headed to post losses for the fifth straight day.
Technical levels to watch for