USD/CAD clings to gains above 1.3350 ahead of Friday's key data

• WTI trades at fresh 13-month lows below $47.
• US Dollar Index steadies near 98.50 in American session.
• Coming up on Friday: PCE Price Index from US and Q4 GDP from Canada.

Despite the broad-based USD weakness on Thursday, the USD/CAD pair climbed to its highest level since September at 1.3375 as the falling crude oil prices kept the commodity-related CAD on the back foot. As of writing, the pair was up 0.2% on a daily basis at 1.3355.

Escalating concerns over the coronavirus outbreak weighing on the global energy demand growth continue to pull crude oil prices lower. The barrel of West Texas Intermediate slumped to its lowest level since January 2019 at $45.88 before recovering modestly. As of writing, the WTI was down 3.7% on a daily basis at $46.80 and was erasing more than 12% for the week.

USD weakness limits pair's rally

On the other hand, the greenback's poor performance seems to be capping the pair's upside. According to the CME Group FedWatch Tool, markets are pricing a more-than-70% probability of a 25 basis points rate cut in March following the sharp fall witnessed in the US Treasury bond yields. The US Dollar Index is losing 0.6% on Thursday at 98.55.

The data from the US on Thursday revealed that Durable Goods Orders declined less than expected in January and the GDP expanded by 2.1% (second estimate) in the last quarter of 2019.

On Friday, the US Bureau of Economic Analysis will release the core PCE Price Index, the Fed's preferred gauge of inflation, alongside Personal Income and Personal Spending figures. The Canadian economic docket will feature the fourth-quarter GDP growth, which is expected to drop to 0.3% on a quarterly basis from 1.3% recorded in the third quarter.

Technical levels to watch for