USD/CAD posts modest losses below 1.2700 as focus shifts to Powell speech
- USD/CAD is edging lower for the third straight day.
- WTI trades in a tight range near $53 on Thursday.
- US Dollar Index holds near 90.30 as investors await FOMC Chairman Powell's speech.
The USD/CAD pair closed in the negative territory for the second straight day on Wednesday and seems to be having a tough time staging a rebound on Thursday. As of writing, the pair was down 0.15% on the day at 1.2675.
DXY stays in consolidation above 90.00
During the Asian trading hours, reports suggesting that President-elect Joe Biden will unveil a stimulus plan worth around $2 trillion provided a boost to the US Treasury bond yields and helped the greenback stay resilient against its rivals. The US Dollar Index (DXY) is currently flat on the day at 90.35 as investors remain on the sidelines ahead of FOMC Chairman Jerome Powell's speech at 1730 GMT.
Powell will be speaking at an online event and market participants will look for fresh clues regarding possible adjustments to the Federal Reserve's asset purchase program. Since the beginning of the year, T-bond yields have been impacting the USD's market valuation and a sharp reaction to Powell's remarks in yields could drive USD/CAD's movements in the second half of the day. Moreover, the US Department of Labor's weekly Initial Jobless Claims will be featured in the US economic docket as well.
Meanwhile, the barrel of West Texas Intermediate (WTI) is trading in a narrow band near $53 on Thursday. If Biden's plan includes additional direct payments to Americans, crude oil prices could push higher on an improved energy demand outlook and help CAD gather strength against its rivals.
Technical levels to watch for