The USD/CAD pair remains in a defensive stance around 1.3510, rebounding from its two-week low as it enters the European session on Friday. This resilience comes even as the pair fails to respond positively to the surging prices of Canada’s primary export, WTI crude oil, with traders keeping a close watch on upcoming US employment data and Canadian GDP figures.
Despite a broader US Dollar recovery and anticipation of crucial economic data, the USD/CAD bears persisted in the previous session. The rise in WTI crude oil prices to a multi-day high added further downward pressure to the pair. Additionally, a significant revision in Canadian Current Account data for Q1 2023 contributed to the downward momentum.
Meanwhile, WTI crude oil has seen a four-day consecutive increase, reaching $83.40 and hitting a three-week high. This rally is driven by a series of measures implemented by China to safeguard its economy from a return to pandemic-induced conditions. Notably, the People’s Bank of China reduced the foreign reserve ratio by 2.0%, and numerous Chinese banks lowered Yuan deposit rates. Adverse weather conditions, including Hurricane Idalia in the US and concerns about a typhoon in China, along with a substantial inventory drawdown in the US, have also fueled the rise in oil prices.
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