- USD / CAD remains on track to close for the second day in a row in negative territory.
- Rising crude oil prices will provide a boost to the CAD on Thursday.
- The USD remains on the defensive after disappointing US data.
The pair USD / CAD continues to exert downward pressure on the US business hours pressured by the general weakness of the dollar and rising crude prices. At the time of writing, the pair is trading at its lowest level in three weeks at 1.2436, losing 0.7% on the day.
DXY appears to close below 92.00
Hours earlier, US data showed that the first estimate from the US Bureau of Economic Analysis of annualized growth in Gross Domestic Product (GDP) for the second quarter reached 6.5%. This reading disappointed the market’s expectation of 8.5% by a wide margin. Additionally, the US Department of Labor reported that there were 400,000 initial claims for unemployment benefits in the week ending July 24, compared with an analyst estimate of 3.8%.
The dollar, which came under renewed selling pressure on Wednesday after FOMC Chairman Jerome Powell took a dovish tone, continued to weaken against its rivals. At time of writing, the US Dollar Index (DXY) was down 0.4% to 91.90.
On the other hand, market optimism, reflected by rising US stocks, helped crude oil prices gain ground on Thursday. With a barrel of West Texas Intermediate (WTI) gaining more than 1.5%, the Canadian dollar related to commodities is retaining its strength.
On Friday, Statistics Canada will release GDP data for May along with the Industrial Product Price Index for June. The Personal Consumption Expenditure (PCE) price index will be included in the US economic agenda.
Technical levels
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