- USD/CAD trades direction less under 1.31
- COVID-19 fears & dovish Fed expectations dragged on USD capping gains.
- A slight pull back in crude oil prices undermined the CAD offering support.
USD/CAD struggled for direction moving between gains and losses around the 1.3075 .
A combination of diverging factors kept the pair range bound on Friday. Concerns over the economic hit from tightening COVID-19 restrictions in several US states are keeping US dollar bulls defensive, limiting gains on USD/CAD.
Speculation of additional easing by the Fed is adding pressure to the greenback. Although risk off trade and safe haven demand offers some support to the USD.Risk sentiment declined after the US Treasury Secretary Steven Mnuchin pulled the plug on some Fed coronavirus pandemic relief measures.
A mild drop in oil prices weighed on the commodity-linked CAD adding pressure to the USD/CAD r. Rising covid cases globally are hitting the future demand outlook for fuel putting downward pressure on oil prices.
Looking ahead Canadian monthly retail sales data will be in focus. Broader risk sentiment and covid developments will drive the USD.