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USD/CAD remains on track to close below 1.4100

  • USD/CAD falls for third straight day on Thursday.
  • WTI extends slide on demand concerns, trades below $23.
  • US Dollar Index drops to 99.50 on intensifying USD selloff.

After spending the first half of the day above the 1.42 handle, the USD/CAD pair turned south and touched its lowest level in more than a week at 1.4008 amid broad-based USD weakness. Although the pair recovered modestly on falling crude oil prices, it's still down 0.93% on the day at 1.4058 and remains on track to close in the negative territory for the third straight day.

USD weakness remains the main market theme

Despite the unprecedented increase seen in the US weekly Initial Jobless Claims, the market sentiment remained positive during the American session as investors continued to cheer the $2 trillion fiscal stimulus package. The US Dollar Index (DXY), which erased 1.5% in the last two days, continued to push lower to allow the bearish pressure to remain intact. At the moment, the DXY is down 1.5% on a daily basis at 99.45.

The US Department of Labor reported that Initial Claims for unemployment benefits in the US jumped to 3,283,000 for the week ending March 21 from 282,000 in the previous week.

On the other hand, the dismal global energy demand outlook due to worldwide lockdowns continue to weigh on crude oil prices. With the barrel of West Texas Intermediate erasing nearly 7% at $22.60 on Thursday, the CAD may have a difficult time preserving its strength against its rivals in the near-term.

Earlier in the day, head of the International Energy Agency (IEA) Fatih Birol said that the global crude oil demand could drop as much as 20%, or 20 million barrels per day, in 2020.

Technical levels to watch for

 

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