- USD/CAD struggled to capitalize on the early positive move to the 1.3175-80 region.
- A mild gain in USD demand was supportive.
- A reasonable rebound in oil prices underpinned the loonie, limiting any strong gains.
USD/CAD extended losses slipping to a daily low of 1.3135 early in the European session.
The pair built on the previous day’s firm rebound from six-week lows and picked up momentum across the European session in early trade on Thursday The momentum was underpinned by a mild increase in US dollar demand, supported by a weaker tone in the equity markets.
The mood in the market soured as hopes for a pre-election US fiscal stimulus package faded after President Trump accused Democrats of being unwilling to compromise .
House Speaker Nancy Pelosi acknowledged that the rescue package was unlikely to be agreed prior to the elections in under two weeks’ time. Investors are also questioning Congress’ ability to overcome strong opposition from Senate Republicans who were in favour of a significantly smaller stimulus bill.
The USD/CAD’s run higher lost steam USD/CAD at 1.3175-80 region. A solid rebound in crude oil prices supported the commodity-linked currency – the loonie – adding pressure. The downside appears limited, as investors await developments on stimulus talks. The final presidential debate between Trump and Democrats candidate, Joe Biden could inject some volatility.
Initial Weekly Jobless Claims and broader market risk sentiment, will influence the USD price dynamics and produce some short-term trading opportunities.