During the Asian trading session on Wednesday, the USD/CAD pair continued its downward trajectory for the second consecutive day, nearing the 1.3560 mark. The movement reflects the influence of rising crude oil prices, bolstering the Canadian Dollar (CAD) and subsequently pressuring the USD/CAD pair.
The price of Western Texas Intermediate (WTI) crude oil hovers around $84.80, marking its highest level since October 2023. This surge is attributed to a combination of factors including the weakening US Dollar and concerns regarding supply disruptions amid geopolitical tensions.
Furthermore, the USD/CAD pair faces downward pressure as the US Dollar Index (DXY) struggles following dovish remarks from Federal Reserve (Fed) officials. Cleveland Fed President Loretta Mester’s indication of potential rate cuts later in the year, coupled with San Francisco Fed President Mary Daly’s suggestion of three rate cuts in 2024, pending substantial evidence, have weighed on the greenback.
In economic news, Tuesday saw a positive uptick in US February JOLTS Job Openings, surpassing market expectations, along with a notable increase in Factory Orders for February, signaling resilience in the US economy.
Looking ahead, market participants are closely eyeing Canadian Import and Export data scheduled for Thursday, alongside labor data to be released on Friday. In the US, attention is focused on the ADP Employment Change and ISM Services PMI data on Wednesday. Additionally, Federal Reserve Chairman Jerome Powell’s forthcoming speech at the Stanford Business, Government, and Society Forum will provide insights into the outlook for the US economy.
