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USD/CAD struggles to hold above 1.4500 as oil recovery picks up steam

  • WTI rebounds above $24 on Thursday, adds more than 10%.
  • US Dollar Index retreats from multi-year highs, steadies below 102.
  • Weekly Initial Jobless Claims jumped to 281K in the US.

The USD/CAD pair advanced to its highest level since January 2017 at 1.4668 on Thursday but erased its gains in the second half of the day as the recovering crude oil prices helped the commodity-related CAD find demand. As of writing, the pair was trading at 1.4468, erasing 0.25% on a daily basis.

Earlier in the day, the Fed announced that it has established temporary USD swap lines with Australia, Brazil, Denmark, Korea, Mexico, Norway, New Zealand Singapore and Sweden to address the USD shortage in the funding markets. The US Dollar Index, which advanced beyond the 102 handle for the first time in more than three weeks, lost its traction and allowed the pair to pull away from its highs. At the moment, the index is still up 0.75% on the day at 101.67.

WTI rebounds decisively on Thursday 

On the other hand, crude oil’s technical recovery that started during the European trading hours on Thursday gathered momentum after the US Department of Energy said that it will buy up to 30 million barrels of crude oil by the end of June.

With the barrel of West Texas Intermediate trading at $24.70 and adding 10.6% on Thursday, the CAD is preserving its strength against its major rivals. In fact, the EUR/CAD pair is down 1.7% at 1.5566 to reflect the CAD’s upbeat performance.

Meanwhile, the weekly data from the US showed that Initial Jobless Claims rose to 281,000 from 211,000 for the week ending March 14th to reflect the negative impact of the coronavirus outbreak on the US labour market.

Technical levels to watch for

 

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