Ella 
USD/CAD climbed above the 1.3200 mark on Thursday, retracing its recent losses but remaining on track to end the day lower for a third straight week. USD/CAD has ended lower in seven of the last nine consecutive trading weeks.
Earlier on Thursday, U.S. economic data was poor, with initial jobless claims and existing home sales falling short of targets last week, amplifying risk buying.
U.S. initial jobless claims fell short of expectations at 218,000 for the week ended December 22, compared with expectations of 210,000 and higher than the previous reading of 206,000 (revised to 205,000). U.S. pending home sales in November also fell short of expectations, staying flat at 0.0%, compared with expectations for 1.0%, up from October’s -1.2% (pre-employment value was revised down to -1.5%).
Falling crude oil drags Canadian dollar lower
Poor U.S. data initially stoked risk appetite as weak U.S. economic indicators raised the possibility that the Federal Reserve would enter a rate-cutting cycle early.
However, a disappointing auction of U.S. 7-year Treasury notes dampened risk appetite before Thursday’s close. At Thursday’s $40 billion Treasury auction, the U.S. 7-year Treasury yield rose to 3.859% from 3.837%, triggering a reversal in risk appetite flows this week.
Crude oil fell on Thursday, market risk appetite retreated, and the U.S. dollar strengthened, pushing the Canadian dollar lower, setting the stage for a rebound in USD/CAD at the end of the week, as the 2023 trading ends on Friday.
