USD/CAD prints six month highs above 1.2800 amid a weaker loonie

• Sharp decline in crude oil prices weighs on the loonie.
• USD/CAD off highs, still up more than a hundred pips on Thursday.

The USD/CAD rose further during the American session spiked to 1.2818, reaching the highest intraday level since February. In the pulled back under 1.2800, trimming gains. The loonie is falling for the fourth consecutive day versus the US dollar.

Risk aversion, oil slides 

The rally of USD/CAD is being supported by risk aversion and the decline in crude oil prices. In Wall Street, equity prices have recovered but the correction in the pair was limited due to the decline in crude oil prices that weighs on the loonie.

The WTI is losing more than 3% on Thursday, and remains under pressure near the $63.00 area. CAD is the worst performer among G10 currencies.

Economic data in the US came in mixed with initial jobless claims falling more than expected to 348K, the lowest level since March 2020 while the Philly Fed pulled back unexpectedly to 19.4. In Canada, ADP employment data showed the private sector added 221 jobs in July. On Friday, retail sales data is due in Canada, while in the US the economic calendar is empty.

Technical levels