On Thursday, the USD/CAD was seen fluctuating in a range around the 1.2400 mark.
The loonie was supported by rising oil prices, which limited the currency’s upside potential.
The US dollar’s slight rise helped prevent any losses ahead of the US macroeconomic data.
Throughout the first part of the European session, the USD/CAD pair maintained its sideways consolidative price action, remaining limited in a range around the 1.2400 mark.
A confluence of opposing forces failed to generate any real momentum, preventing the USD/CAD pair from building on its recent gains. The recent positive run in crude oil prices kept the commodity-linked loonie afloat while limiting gains for the major. However, a slight strengthening of the US dollar provided some support and limited the fall.
The dollar rose to its highest level since April on speculation that the Federal Reserve will tighten its monetary policy if inflation pressures persist. Hawkish comments from Dallas Fed President Robert Kaplan, who said they are witnessing a broadening of price pressures and would want to taper sooner than the end of the year, added to the expectations.
A substantial rise in US Treasury bond yields, on the other hand, acted as a tailwind for the greenback. The lack of substantial follow-through purchasing, on the other hand, should alarm optimistic traders and position them for any additional appreciation. Market investors are now looking for some short-term trading stimulus in the form of major US macro data.
The typical Initial Weekly Jobless Claims and ISM Manufacturing PMI will be released later in the early North American session, according to the US economic calendar. The USD will be driven by this, as well as US bond yields. Traders may also be influenced by stories from the OPEC+ meeting, which will have an impact on oil price dynamics and provide some interesting opportunities./n
