- USD/CAD reversed its direction after pushing lower earlier in the day.
- US Dollar Index extends rally beyond 92.50 on Thursday.
- WTI pulls away from multi-year highs, remains on track to post strong daily gains.
After dropping to a daily low of 1.2381 during the European trading hours, the USD/CAD pair staged a decisive rebound in the second half of the day and reached its highest level in 10 days at 1.2442. As of writing, the pair was up 0.35% on a daily basis at 1.2437.
USD strength outweighs oil rally
Earlier in the day, surging crude oil prices provided a boost to the commodity-sensitive loonie. On the back of reports suggesting that OPEC+ will debate an extension of output cuts until the end of 2022, the barrel of West Texas Intermediate reached its highest level since October 2018 at $76.20. However, with the latest headlines revealing that OPEC+ has decided to delay the ministerial meeting until Friday to have further discussions on the output strategy, oil prices retraced a portion of the daily gains. At the moment, WTI was still up nearly 2% on the day at $74.90.
On the other hand, the greenback continues to gather strength ahead of Friday’s Nonfarm Payrolls data, allowing USD/CAD to stay in the positive territory.
Supported by upbeat data and rising US Treasury bond yields, the US Dollar Index is currently trading at its highest level in nearly three months at 92.58, gaining 0.25% on the day.
The US Department of Labor reported on Thursday that the weekly Initial Jobless Claims fell to the lowest level since March 2020 at 364,000. Additionally, the ISM Manufacturing PMI arrives at 60.6 in June, showing that the economic activity in the manufacturing sector continued to expand at a robust pace.