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The USD/CAD pair fresh session lows of 1.2822, revering sharply from 1.2870 highs. The Loonie is seen benefiting from a solid rebound in the oil prices after news that the forest fire rage in Canada still persists and state of emergency has been declared.
Overnight, the dollar remained broadly higher against the other major currencies on Wednesday, after the release of mostly positive U.S. data boosted optimism over the strength of the economy.
In addition, payroll processing firm ADP said non-farm private employment rose by 156,000 last month, missing expectations for an increase of 196,000.
The USD/CAD pair will continue to monitor developments surrounding oil markets, as markets will also focus on the Canadian building permits data due later in the NY session.
The bulls are seen tightening their grip on the Canadian dollar as the oil prices halt the corrective slide and revert to the green zone. Both crude benchmarks now trade +0.20% higher, hovering near fresh five-month peaks reached yesterday after the EIA inventory report showed smaller than expected rise in the US crude supplies.
The greenback moved in lockstep with soaring oil prices on Wednesday, rising considerably in U.S. afternoon trading. U.S. crude futures pared earlier losses from Wednesday morning, after the U.S. Energy Information Administration (EIA) said U.S. commercial crude oil inventories increased by 2.1 million barrels for the week ending on April 15. As a result, WTI crude surged more than 3% to eclipse $44 a barrel.
The recent optimistic remarks from BOC Governor Poloz also keep the sentiment around the loonie underpinned. BOC Chief noted that the economic data have been encouraging and it would require three-year adjustment to oil price drop.
The US economic releases will be also closely watched for further momentum on the major.
USD/CAD spot has filled yesterday’s gap towards the 1.3000 handle in the aftermath of the Doha meeting on Sunday, and remains well on its way to potentially challenge 2016 lows in the 1.2740 region if current market conditions extend into the European/NA session.
Renewed offered tone around the greenback plus a recovery in crude oil prices – barrel of West Texas Intermediate now above the $41.00 mark – is helping to sustain the solid risk-on sentiment following the Asian session on Tuesday.
Brent futures were last down 0.6 percent at $42.65 a barrel, but well above Monday’s low of $40.10. Oil prices had edged higher earlier on Tuesday, supported by a Kuwaiti oil industry strike that has led to a cut in the country’s oil production.
Data wise today, Building Permits and Housing Starts will take centre stage in US, while the speech by Governor S.Poloz is expected in Canada.
The USD/CAD Spot is now advancing for the second consecutive session amidst a solid recovery of the greenback in the global markets, managing to rebound from yesterday’s post-BoC lows near 1.2740.
Overnight, the dollar rose to one-week highs against the other major currencies on Wednesday, despite the release of disappointing U.S. economic reports, as the greenback continued to recover from sharp losses posted earlier in the week. The U.S. Census Bureau said that retail sales fell by 0.3% in March, disappointing expectations for an uptick of 0.1% and after a 0.1% fall the previous month.
Adding to the upside, CAD is tracking a correction lower in the barrel of West Texas Intermediate from Wednesday’s fresh 2016 highs around $42.40 after the EIA has reported another build up in crude inventories (+6.63 million barrels).
Focus U.S CPI Data.
Next on tap will be US CPI figures along with Initial Claims. In Canada, New Housing Price index is due for the month of February.
The USD/CAD bulls were offered respite from the retreat in oil prices, which induced a minor correction in the loonie, after having hit fresh nine-month highs at 1.2750 in the last US session.
Overnight, the dollar rose against the other major currencies on Tuesday, after the International Monetary Fund cut its global growth forecast for the fourth time in the past year, boosting demand for safer assets.
Focus BOC monetary policy decision.
Renewed strength in the US dollar against its major peers also aided the recovery in the USD/CAD pair. Attention now shifts towards the BOC monetary policy decision due later today for next direction on the loonie.
USD/CAD Spot is now retreating for the second straight session following a failed attempt to break above recent highs around the 1.3200 handle (Tuesday) on a more sustainable fashion.
Yesterday’s recovery of crude oil prices was further sustained by a drop in crude oil inventories according to the EIA’s report, all giving extra wings to CAD. In addition, the tone of the FOMC minutes on Wednesday was pretty neutral, failing to support the greenback.
The USD/CAD pair is coming down from yesterday’s multi-day peaks above the 1.3200 mark, bolstered by a sudden recovery of crude oil prices while the USD seems to have lost some upside momentum.
Ahead in the day, Canadian PMI tracked by Ivey is due ahead of the weekly report on crude oil inventories gauged by the EIA. It is worth noting that API reported crude stockpiles have decreased by 4.3 million barrels during last week (Tuesday).