As WTI weakens, the USD/CAD tries to retest multi-day highs.
The Bank of Canada cuts bond purchases and expresses confidence in the economy.
Powell has lowered the value of the US currency, and all eyes are now on US/Canadian data and Powell 2.0.
After bouncing off a small fall to approximately 1.2520, USD/CAD is going back towards multi-day highs of 1.2549.
The major was pulled lower by a renewed selling wave in the US dollar across the curve, as European traders responded to the hawkish Bank of Canada (BOC) decision as they arrived at their desks, fueling the latest leg down in USD/CAD.
Despite decreasing WTI prices, the recovery momentum remains alive, especially in light of recent Reuters reports claiming that Saudi Arabia and the United Arab Emirates have achieved an agreement that should lead to an OPEC+ agreement on oil output hike.
After plummeting to five-day lows of 1.2429 following the BOC’s taper decision, the currency pair produced a scorching comeback surge on Wednesday. In a demonstration of confidence in the economy’s speed, the central bank reduced its bond purchases to CAD2 billion per week.
The fall in the spot was also exacerbated by Fed Chair Jerome Powell’s dovish remarks, in which he stated that reducing stimulus assistance is still a long way off, given the lack of economic momentum. Powell’s statement sparked a new sell-off in the US dollar, as well as in Treasury yields.
In the days leading up to Powell’s second day of hearing, all eyes will be on the US and Canadian jobs figures. Meanwhile, for new trading chances in the CAD pair, covid developments and oil price activity will be attentively monitored./n
