USD/CAD drops to 1.2370 area on surging crude oil prices
- USD/CAD broke below 1.2400 during the European session on Thursday.
- US Dollar Index stays relatively quiet below 92.50 ahead of PMI data.
- Surging crude oil prices provide a boost to CAD.
After climbing to a daily high of 1.2418 in the early trading hours of the European session on Thursday, the USD/CAD pair reversed its direction and dropped all the way down to 1.2363. As of writing, the pair was losing 0.15% on a daily basis at 1.2377.
WTI renews multi-year highs above $75
Surging crude oil prices are providing a boost to the commodity-sensitive loonie on Thursday.
Ahead of the highly-anticipated OPEC+ meeting, Reuters reported that producers were expected to discuss an extension to output cuts until the end of 2022. Furthermore, the group is reportedly looking to ease production curbs by a total of 2 million barrels per day from August to the end of the year. As of writing, the barrel of West Texas Intermediate (WTI) was trading at its highest level since October 2018 at $75.80, rising 3.2% on a daily basis.
On the other hand, the greenback stays relatively quiet ahead of the ISM's Manufacturing PMI report for June. Earlier in the day, the data published by the US Department of Labor showed that the weekly Initial Jobless Claims declined to 364,000 from 415,000. Although this reading came in better than analysts' estimate of 393,000, it failed to help the USD gather strength. At the moment, the US Dollar Index is posting small daily losses at 92.30.
Technical levels to watch for