USD/CAD advances to near 1.3450 despite improved Crude prices, US Manufacturing PMI eyed

• USD/CAD moves on an upward trajectory on a stronger US Dollar after the Fed’s hawkish remarks.
• The improved WTI price failed to contribute support for the Canadian Dollar (CAD).
• The stronger-than-expected Canadian GDP data could provide support to deter the BoC from reducing rates in the February meeting.

USD/CAD receive upward support for the second consecutive session, trading higher around 1.3450 during the European session on Thursday. The Canadian Dollar (CAD) failed to cheer the improved Gross Domestic Product (MoM) from Canada in response to the hawkish remarks by the Federal Reserve (Fed). Even the improved Crude oil prices failed to contribute any support to undermining the USD/CAD pair.

West Texas Intermediate (WTI) oil price trades higher around $76.40 per barrel, by the press time. Crude oil prices rise on the prevailing threat of supply disruption amid escalated tension in the Middle East.

Canada’s Gross Domestic Product (GDP) rose to a growth rate of 0.2% monthly in December. The market consensus was a growth of 0.1% against the flat 0.0% in November. Furthermore, the S&P Global Manufacturing PMI for January is due on Thursday. The upbeat growth data could deter the Bank of Canada (BoC) from reducing interest rates in its upcoming February meeting.

The market sentiment has shifted in favor of the US Dollar (USD) following Federal Reserve (Fed) Chairman Jerome Powell’s dismissal of any likelihood of an interest rate cut in the March meeting. Powell highlighted the persistent presence of elevated inflation and emphasized the robust growth in economic activity.

For additional insights into the economic landscape of the United States (US), traders are likely to closely monitor key events scheduled for Thursday, including US Initial Jobless Claims, Nonfarm Productivity, and ISM Manufacturing PMI.