USD/CAD drops to daily low below 1.2630 on broad USD weakness

USD/CAD came under strong bearish pressure during the American session.
US Dollar Index fell sharply following FOMC Chairman Powell’s speech.
Rising crude oil prices provide a boost to the CAD.

After rising above 1.2700 earlier in the day, the USD/CAD pair reversed its direction and was last seen trading at a daily low of 1.2628, losing 0.45% on a daily basis.

DXY falls sharply on Powell’s remarks

The broad-based USD weakness following FOMC Chairman Jerome Powell’s speech at the Jackson Hole Economic Symposium seems to be weighing heavily on USD/CAD.

Although Powell said he thought at the July policy meeting that it could be appropriate to start reducing asset purchases this year, he refrained from delivering a timeline and triggered a selloff in the USD. Currently, the US Dollar Index is down 0.3% on the day at 92.77.

Assessing Powell’s comments, “Federal Reserve Chair Jerome Powell has defied a vocal chorus of hawks among his colleagues and refrained from a hinting of tapering the bank’s $120 billion/month bond-buying scheme,” noted FXStreet analyst Yohay Elam.

Powell Quick Analysis: Dove defeats the dollar, without a strong NFP, forget about tapering.

Meanwhile, the barrel of West Texas Intermediate (WTI) is rising 1.5% on the day at $68.75, helping the commodity-related CAD preserve its strength ahead of the weekend.