- Oil prices drag the USD/CAD exchange rate.
- Equity sell-off helps the greenback.
- Canadian GDP and US data awaited for fresh cues.
USD/CAD shrugged off its early-day weakness and recovered by more than 45 pips to trade near the intraday high.
The pair had traded in a volatile range yesterday and fell below 1.3300 in the morning. It then attracted buying interest in the last trading day of the week as the weak oil prices undercut the demand for CAD.
Oil fell by 1.5 Percent today to touch multi-month lows as the worries of demand slowdown have arisen as the pandemic cases increased in many countries. On the supply side, the oil prices were affected by the return of Libyan production and an expected January increase in the OPEC+ output.
The US equity declines added to the appeal of the greenback’s safe-haven status and helped the USD/CAD to attract bids. Further gains in the US dollar looks remote as the uncertainty over the presidential elections weighs on the currency.
However, a continuation of the current up move above 1.3400 is still in the cards, and the bullishness might face good resistance near 1.3415-20. A lot depends on the Canadian GDP numbers and US macroeconomic releases due today.
At the time of writing, one US dollar buys 1.3322 Canadian dollars, down -0.01% as of 9:30 AM UTC.
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