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USD/CAD receives downward pressure as Crude oil prices improve.
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WTI price gains ground on the heightened situation in the Red Sea.
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US Dollar might have cheered up the improved ISM Manufacturing data.
USD/CAD snapped its five-day winning streak, trading near 1.3340 in the Asian session on Thursday. The Canadian dollar (CAD) finds upward support on improved crude oil prices.
West Texas Intermediate (WTI) prices rose to around $73.10 a barrel. Crude oil prices are rising as tensions rise in the Israel-Gaza conflict. In addition to geopolitical concerns, the blockade of a key oil field in Libya is playing a role in driving up crude oil prices. Iran-backed Houthis target a container ship in the southern Red Sea on its way to Israel. The incident has raised concerns about maritime security in the Red Sea region.
Canada will see December labor market data, including the unemployment rate and net change in employment on Friday. On the United States (US) docket, labor market data releases including ADP employment changes and initial jobless claims will be watched on Thursday.
The US Dollar Index (DXY) strengthened on risk-off mood, coupled with improved United States (US) Treasury yields. The positive momentum might have found support from the improved ISM Manufacturing PMI report, which showed an increase to 47.4 in December from the previous reading of 46.7, exceeding the market consensus of 47.1. However, JOLTS Job Openings reduced to 8.79M, falling short of the expected figure of 8.85M in November.
The December minutes of the Federal Open Market Committee (FOMC) indicate that participants believe the policy rate has either peaked or is near its highest point in the current tightening cycle. Despite this observation, they highlight that the exact path of the policy will depend on how the economic conditions evolve.
USD/CAD: TECHNICAL LEVELS TO WATCH
