USD/CAD stays in red below 1.2300 after US GDP data
- USD/CAD struggles to stage a rebound on Thursday.
- US economy grew by 6.4% in first quarter of 2021.
- Rising crude oil prices continue to support CAD.
The USD/CAD pair touched its lowest level in more than three years at 1.2278 on Thursday and seems to be having a hard time staging a convincing rebound. As of writing, the pair was up 0.2% on the day at 1.2287.
Rising oil prices provide a boost to CAD
Earlier in the session, the data published by the US Bureau of Economic Analysis revealed that the US economy grew by 6.4% (first estimate) on a yearly basis in the first quarter of 2021. This reading came in better than the market expectation of 6.1%. Additionally, the weekly Initial Jobless Claims declined to 553,000 from 566,000.
The US Treasury bond yields continued to push higher after these data and allowed the greenback to gather strength against its rivals. At the moment, the benchmark 10-year US T-bond yield is up nearly 4% and the US Dollar Index is rising 0.1% at 90.68.
However, the sharp increase witnessed in crude oil prices helps the commodity-related loonie find demand and limits USD/CAD's upside. Currently, the barrel of West Texas Intermediate (WTI) is trading at its highest level since mid-March at $65.30, rising 2.6% on a daily basis.
There won't be any other high-tier macroeconomic data releases from the US in the remainder of the day. Meanwhile, the S&P 500 Futures are up 0.7% and the USD could face some bearish pressure if Wall Street's main indexes surge higher after the opening bell.
Technical levels to watch for