- USD/CAD pair is posting modest daily gains on Friday.
- US Dollar Index continues to push lower below 95.00 ahead of US data.
- Crude oil rebounds modestly following Thursday’s sharp drop.
The USD/CAD pair dropped to its lowest level since June 10th at 1.3349 on Thursday but closed the day flat above 1.3400 as falling crude oil prices and risk aversion weighed on the CAD. On Friday, the pair seems to be having a difficult time making a decisive move in either direction and was last seen posting small daily gains at 1.3421.
Escalating US-China geopolitical tensions and heightened concerns over a slow global economic recovery caused the risk rally witnessed during the first half of the week to fade away. The sour market mood also hurt crude oil prices and the barrel of West Texas Intermediate (WTI) lost nearly 2% on Thursday.
USD remains on the back foot despite flight to safety
On the other hand, slumping US Treasury bond yields made it difficult for the greenback to find demand despite its safe-haven status and limited the pair’s upside. The 10-year T-bond yield closed the first four days of the week in the negative territory and lost more than 9% during that period.
Although the WTI is recovering and gaining 0.7% on Friday, the risk-sensitive loonie struggles to attract investors. Meanwhile, the US Dollar Index is losing 0.15% at 94.65, forcing the pair to remain stuck in its daily range.
Later in the day, the IHS Markit will release the flash Manufacturing and Services PMI data for the US. Additionally, New Home Sales data for June will be featured in the US economic docket as well.