USD/CAD is at the highs of the day, up 36 pips 1.3628 -- a session high.

The gains come amidst a broad US dollar rally that follows signs of an imminent debt ceiling deal. That has led the market to price in a high likelihood of a Fed rate hike in either June or July, stretching the USD yield differential above CAD and other majors. Today, US jobless claims also fell and Q1 GDP was revised higher in fresh signs that the US economy is weathering higher rates without trouble.

On the CAD side, average weekly earnings fell in March to +1.45% from 1.88%, which is the lowest growth since early 2021 and a sign that rate hikes are biting.

Canadian hourly earnings

But the larger drag on CAD today is from energy, with WTI crude oil down $2.03 to $72.30 on signs of soft gasoline demand ahead of the US long weekend. The market also continues to fret about a recession later this year because of higher interest rates.

Technically, the late-April high of 1.3668 is a spot to watch but the downtrend since March has now broken.

USDCAD daily