USD/CAD rebounds swiftly from over one-week low, eyes 1.2600 mark amid stronger USD
- USD/CAD staged a goodish intraday bounce from over a one-week low set earlier this Thursday.
- Weaker oil prices undermined the loonie and extended support amid resurgent USD demand.
- Bulls seemed rather unaffected by the disappointing release of the US Retail Sales figures.
The USD/CAD pair recovered nearly 70 pips from over a one-week low and jumped to a fresh daily high, around the 1.2585-1.2590 region during the early North American session.
A combination of supporting factors assisted the USD/CAD pair to attract some buying near the 1.2520 area on Thursday and stall the post-BoC slide from the four-week high touched the previous day. Crude oil prices came under some renewed selling pressure and undermined the commodity-linked loonie. This, along with an intraday pickup in the US dollar demand, acted as a tailwind for spot prices.
The US Energy Information Administration reported on Wednesday that oil stocks in the US rose by more than 9 million barrels last week, which, in turn, weighed on the black liquid. That said, worries that falling output in sanctions-hit Russia - the world's second-biggest exporter - will tighten supply limited the downside amid less active markets due to the long weekend in Europe and America.
On the other hand, the USD made a solid comeback and reversed a major part of the overnight pullback from a near two-week high amid the post-ECB downfall in the shared currency. Apart from this, the prospects for a more aggressive policy tightening by the Fed and rebounding US Treasury bond yields underpinned the greenback, allowing bulls to shrug off mostly disappointing US macro releases.
Data released by the US Census Bureau showed that the US Retail Sales rose by 0.5% MoM in March as against expectations for a 0.6% increase and the 0.8% growth recorded in the previous month. Adding to this, the Weekly Initial Jobless Claims climbed from 167K to 185K during the week ended April 8 and missed consensus estimates pointing to a reading of 171K, though did little to influence the USD.
Separately, Canadian Manufacturing Sales posted stronger than anticipated growth of 4.2% MoM in February, though was largely offset by an unexpected decline in Wholesale Sales by 0.4%. Thursday's US economic docket also features the release of the Prelim Michigan Consumer Sentiment Index, which, along with the US bond yields, might influence the USD. Traders will further take cues from oil price dynamics to grab some short-term opportunities around the USD/CAD pair.
Technical levels to watch