USD/CAD advances beyond 1.2450 on unabated USD strength

  • USD/CAD extends rally to fresh multi-month highs on Friday.
  • US Dollar Index continues to push higher after breaking above 92.00.
  • CAD struggles to capitalize on recovering crude oil prices. 

The USD/CAD pair broke above 1.2400 on Friday and reached its strongest level since April 26 at 1.2453. As of writing, the pair was up 0.7% on the day at 1.2445. On a weekly basis, the pair is up nearly 300 pips and remains on track to post its largest weekly gain of the eyar. 

Bullard comments boost USD

The unabated USD strength remains the main market theme ahead of the weekend. In the absence of significant fundamental drivers and high-tier macroeconomic data releases, the US Dollar Index preserved its bullish momentum on Friday. Additionally, the sharp drop witnessed in Wall Street’s main indexes allowed the USD to gather additional strength. Currently, the DXY is at its strongest level in more than two months at 92.35, rising 0.5% on a daily basis.

Earlier in the day, St. Louis Fed President James Bullard told CNBC that the Fed’s June meeting represented a “somewhat hawkish” move. Bullard further noted that inflation was more intense than expected and said FOMC Chairman Jerome Powell officially opened taper discussions at the last meeting.

Meanwhile, the barrel of West Texas Intermediate (WTI) is up more than 1% at $71.85 on Friday but rising crude oil prices don’t seem to be helping the loonie limit its losses ahead of the weekend.

Technical levels to watch for

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