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USD/CAD hits fresh two-month highs above 1.3300

  • WTI continues to erase Wednesday's recovery gains, trades near $50.50.
  • US Dollar Index extends rally toward mid-98s on Thursday.
  • Unemployment Rate in Canada is expected to stay unchanged at 5.6% in January.

After spending a large portion of the day in a narrow channel around the 1.3270 mark, the USD/CAD pair gained traction during the American trading hours and touched its highest level since the first week of December at 1.3310. As of writing, the pair was up 0.23% on the day at 1.3308.

WTI reverses direction

Renewed selling pressure surrounding crude oil seems to be weighing on the commodity-sensitive CAD in the second half of the day. Reports suggesting the OPEC+ Joint Technical Committee (JTC) will recommend an additional oil output cut of 600K barrels per day to negate the impact of the coronavirus outbreak on the global oil demand disappointing investors who were hoping for a cut of 1 million barrels per day. As of writing, the barrel of West Texas Intermediate was trading at $50.55, losing 1.1% on a daily basis.

On the other hand, the US Dollar Index is pushing higher for the fourth straight day to help the bullish momentum remain intact. 

The data published by the US Bureau of Labor Statistics revealed that Unit Labor Costs rose 1.4% in the fourth quarter as expected and the Nonfarm Labor Productivity improved to +1.4% from -0.2% to provide an additional boost to the greenback ahead of Friday's critical Nonfarm Payrolls data. At the moment, the US Dollar Index is at its highest level in more than two months at 98.45.

On Friday, the Canadian jobs report will be featured in the economic docket as well. Experts see the Unemployment Rate staying unchanged at 5.6% in January. 

Technical levels to watch for

 

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