The Loonie was the highlight performer today. The USDCAD pair fell 0.81% since yesterday’s NY opening level, dropping from 1.2641 to 1.2536 at the NY open today as a surge in crude oil prices worsened the slide.
The Canadian dollar is advancing by anticipation that oil prices will continue to climb, with West Texas Intermediate (WTI) reaching $100.00/b. The US Energy Information Administration released its December Short Term Energy Outlook (STEO) on Tuesday and predicted that global demand would rise by 3.6 million barrels per day, a 70,000 b/day increase over its November forecast.
In addition, the American Petroleum Institute weekly crude stock report showed US inventories falling by 1.02 million barrels. Together, the news fueled a jump in WTI to $81.96/b overnight from Tuesday’s low of $78.86/b.
Federal Reserve’s Chair Jerome Powell’s nomination hearing drove the latest US dollar sell-off. Powell didn’t say anything new but acknowledged that the Fed would normalize policy sooner than previously anticipated. Risk sentiment got a boost after Powell softened risks for quantitative tightening, saying it would take two, three, or four meetings to decide the procedures needed to reduce the balance sheet.
Looking forward for today the US will release their monthly PPI and Unemployment claims. There are no Canadian economic reports on tap today.
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