USD/CAD erases daily gains, stays quiet below 1.2700 ahead of US data, Fedspeak
- USD/CAD trades in a tight range following two-day rally.
- US Dollar Index posts modest losses, holds above 92.50.
- WTI continues to push higher toward $70 on Thursday.
The USD/CAD pair closed the previous two trading days in the positive territory and reached a two-week high of 1.2763 on Wednesday. On Thursday, the pair is fluctuating in a relatively tight range and was last seen trading flat on the day at 1.2688.
Rising oil prices support CAD
On Wednesday, the Bank of Canada (BoC) left its monetary policy settings unchanged as expected. Assessing the BoC's policy statement, "assuming the recovery is able regain its footing over the coming 7 weeks, we think the Bank will be looking to step down its pace of QE at the late-October meeting," said National Bank of Canada analysts. "As always though, data dependency is the name of the game."
Meanwhile, the US Dollar Index (DXY) edged higher for the third straight day on Wednesday as the poor performance of Wall Street's main indexes helped the USD find demand as a safe haven. Ahead of the US Department of Labor's weekly Initial Jobless Claims data, the DXY is consolidating its daily gains and was last seen losing 0.15% on the day at 92.56.
Additionally, New York Federal Reserve President John Williams and Federal Reserve Governor Michelle Bowman will be speaking later in the day.
On the other hand, rising crude oil prices on declining oil output in the Gulf of Mexico seems to be helping the commodity-related loonie stay resilient against its rivals. Currently, the barrel of West Texas Intermediate, which gained 1.5% on Wednesday, is up 0.5% at $69.70.
Technical levels to watch for