USD/CAD falls below 1.3200 at the end of the US session

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The USD/CAD pair extended its decline at the end of the US session and touched its lowest level since September 21 at 1.3196. At the time of writing, the pair was down 0.4% at 1.3200.

WTI rises above $41

Rising crude oil prices on Thursday continues to give the Canadian dollar a boost on commodities. Oil production in the US has declined by more than 1.5 million barrels per day due to the Delta Hurricane. It dealt a tremendous blow to the US offshore Gulf of Mexico production in 15 years, halting most of the region’s oil and almost two-thirds of its natural gas output. A barrel of West Texas Intermediate shot higher and was last seen gaining about 3% on the day at $41.20.

According to the National Hurricane Center, an already massive and powerful storm, Delta could intensify further on Friday.

Earlier in the day, Bank of Canada Governor Tiff Macklem said they were not actively discussing negative interest rates, adding that they could expand monetary tools if necessary. However, these comments were largely ignored by market participants.

The US Dollar Index remains flat

On the other hand, the US Dollar Index struggled to make a decisive move in either direction on Thursday and allowed crude oil prices to continue to affect USD/CAD movements. The dollar was further pressured by a further downward stretch in US Treasury yields and could not get any respite from disappointing weekly US jobless claims. Added to this, the president of The United States, Donald Trump, refused to participate in a virtual debate, adding to the political uncertainty and doing little to support the dollar.

At the moment, the DXY is practically unchanged on the day at 93.60.

On Friday, the Canadian employment report will be published. Investors will also keep a close eye on crude prices. Markets expect the unemployment rate in Canada to fall to 9.7% in September from 10.2% in August, and a weaker-than-expected reading could limit CAD gains even as oil’s rally continues.

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