Oil Prices Rose, USD/CAD Snapped Its Winning streak, Trading Around 1.3340

During the fourth Asian session, USD/CAD broke its five-day winning streak and fell to around 1.3340. The Canadian dollar found upside support on higher crude oil prices.

WTI oil prices were higher near $73.10 a barrel. Crude oil prices are rising, driven by rising tensions over the Israel-Gaza conflict. In addition to geopolitical issues, supply disruptions from a key oil field in Libya also boosted crude prices. Iran-backed Houthi rebels attacked a container ship bound for Israel in the southern Red Sea. This incident heightened market concerns about maritime security in the Red Sea region.

Canada is to release labor market data for December on Friday, including the unemployment rate and net employment changes. In the U.S., labor market data will be released on Thursday, including ADP payroll changes and initial jobless claims last week.

The U.S. dollar index strengthened as the market maintained risk aversion and U.S. Treasury yields rose. The ISM Manufacturing Purchasing Managers’ Index rose to 47.4 in December from the previous reading of 46.7, which was better than the expected reading of 47.1. However, US JOLTs job vacancies decreased to 8.79 million in November, lower than the expected value of 8.85 million.

Minutes from the December meeting of the Federal Open Market Committee (FOMC) showed that participants believed that policy rates had peaked or were close to the high point of the current tightening cycle. Still, Fed participants stressed that the specific path of policy will depend on how economic conditions change.

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