USD/CAD gains some positive traction on Thursday, though lacks bullish conviction. Weaker crude oil prices seem to undermine the loonie and offer support to the pair. Sliding US bond yields keep the USD bulls on the defensive and act as a headwind. The USD/CAD pair attracts some buying near the 1.2835-1.2830 region on Thursday and reverses a part of the previous day's retracement slide from a one-week high. The pair holds on to its modest gains through the early European session and is currently trading near the mid-1.2800s, up only 0.10% for the day.
Weaker crude oil prices continue to undermine the commodity-linked loonie, which, in turn, offers some support to the USD/CAD pair. Investors remain concerned that a slowdown in global growth will hit fuel demand. Adding to this, indications that the current tight supply is abating, along with the overnight data showing an unexpected surge in US crude and gasoline stockpiles, weighed on the commodity.
Despite the supporting factor, the USD/CAD pair seem to lack bullish conviction amid subdued US dollar price action. A weaker tone around the US Treasury bond yields turns out to be a key factor keeping the USD bulls on the defensive. That said, hawkish remarks by several Fed officials this week, hinting that more interest rates are coming in the near term, should help limit any meaningful USD downfall.
The fundamental backdrop favours bullish traders and supports prospects for some near-term appreciating move for the USD/CAD pair. Investors, however, seem reluctant and prefer to wait on the sidelines ahead of this week's important macro data. The monthly jobs report from the US and Canada are scheduled for release on Friday, which should provide a fresh directional impetus to the USD/CAD pair.
In the meantime, traders on Thursday might take cues from the release of the Weekly Initial Jobless Claims, due later during the early North American session. This, along with the US bond yields and Fedspeak, might influence the USD demand. Apart from this, oil price dynamics should allow traders to grab short-term opportunities around the USD/CAD pair.
