- USD / CAD remains lower, with the 1.2600 level at risk once again.
- BoC revised its economic forecasts upwards, WTI retests the $ 65.00 level
- The focus is on weekly US jobless claims and speeches by Schembri of the BoC and President Biden.
Buying interest around the Canadian dollar remains intact, keeping USD / CAD on the defensive around the 1.2600 level, as the spotlight shifts to weekly US jobless claims and President Joe Biden’s speech for further momentum.
The USD / CAD extends its downward movement for the fifth day on Thursday, principally affected by the recent rise in WTI prices and the optimistic outlook from the Bank of Canada (BoC) on the economy.
The BoC kept interest rates at an all-time low of 0.25% while maintaining the current pace of bond purchases on Wednesday. On the economy, however, the central bank said that “GDP growth in the first quarter of 2021 is now expected to be positive, rather than the contraction forecast in January.”
In the meantime, oil prices continue to benefit from expectations of faster global economic growth, driven by massive stimuli and successful vaccination campaigns.
In addition, a reduction in crude stocks in the US helped the WTI barrel rally. Keep in mind that Canada is heavily dependent on oil exports for its income and thus a rise in oil prices supports the Canadian dollar.
On the side of the US dollar, the decline in US Treasury yields continues to put downward pressure on the USD.
The decline in US rates from annual highs could be attributed to fears about the economy overheating. Weakening US price pressure also hit the dollar along with yields.
USD / CAD technical levels
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