Oil inventory drawdown impacts USD ahead of EIA data release

The dollar is experiencing mild pressure as traders await the official EIA oil inventory data at the bottom of the hour, with estimates showing a crude oil drawdown of 1.794M barrels, alongside gasoline and distillates builds of 0.627M and 0.440M barrels respectively. Yesterday's private API data revealed a surprisingly large inventory drawdown, which initially supported oil prices and weighed on the dollar through reduced inflation concerns. The energy sector's influence on USD pairs has been notable, with commodity-linked currencies like CAD showing relative strength. Market participants are closely monitoring how the official data compares to expectations, as significant deviations could impact Federal Reserve inflation assessments and subsequent dollar positioning. Technical levels show USDCAD testing support near 1.3650, while oil-sensitive pairs remain in consolidation ahead of the release.