- USD / CAD reversed its direction after climbing to multi-week highs.
- The US dollar index fell back to the 90.50 zone in the American session.
- US data showed that the economy grew 4% in the fourth quarter.
The pair USD / CAD it rose to its highest level since Dec. 24 at 1.2881 on Thursday, but reversed course during US business hours. At time of writing, the pair was virtually unchanged on the day at 1.2798.
DXY Turns South Amid Rising US Stocks
The broad-based USD strength allowed the pair to preserve its bullish momentum during the first half of the day. The risk averse market environment provided a boost to the dollar and the US dollar index (DXY) rose to a daily high of 90.86. However, a positive shift in sentiment after the Wall Street opening bell made it difficult for the USD to continue to outperform its rivals. At the moment, the DXY is down 0.1% on the day at 90.55 and the S&P 500 Index is up almost 2%.
Hours earlier, data released by the US Bureau of Economic Analysis showed that economic activity in the fourth quarter grew by 4% annually. This reading was in line with analysts’ estimate and helped the market mood turn optimistic. Additionally, the weekly Initial Unemployment Claims decreased by 67,000 to 847,000 and the trade deficit in December fell by $ 3 billion – $ 82.5 billion.
Meanwhile, crude oil continues to trade in a tight range on Thursday, allowing the USD market valuation to remain the main driver of USD / CAD movements. A barrel of West Texas Intermediate is currently posting small daily losses of $ 52.50.
On Friday, November GDP data from Canada and figures from the US Personal Consumption Expenditure Price Index will be considered for further momentum.
Technical levels
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