• Firm Treasury yields fail to lend support to the USD.
  • The oil-price decline couldn’t stem the USD/CAD selling.
  • Canadian monetary policy eyed.

USD/CAD trades just below 1.2800, near its daily lows after continued weakness throughout the Asian session.

Today’s selling comes after a recovery attempt yesterday when the pair recouped 55-60 basis points from the lowest levels since April 2018. Bears are in control today after being in the back foot for two days, helped by a soft US dollar.

The risk-on mood in the global markets continued: the recent developments surrounding the vaccine hit the greenback demand along with the pressure from US fiscal stimulus hopes.

The weakness in the US dollar even when US Treasury yields are firm indicate the bearish weight on the haven-linked currency. The crude-oil price softness should have propped up USD/CAD, but that also didn’t materialise.

Traders eye the BoC monetary policy later today, and hence the pair might not see much further weakness until then.

At the time of writing, one US dollar buys 1.2793 Canadian dollars, down -0.19% as of 8:22 AM UTC.