- USD/CAD trades higher amid a combination of factors.
- Oil prices fall, helping the pair gain momentum.
- Greenback’s haven-linked appeal in favour.
The USD/CAD trades near 1.2865-70, slightly up for the day but fails to attract further buying during the early European session. Today’s rise came after a strong intraday pullback of 100 pips yesterday from two-and-half-week highs.
The pair is now in a third straight day in the green, and the uptick is supported by the US dollar strength and the fall in crude oil prices. The loonie generally tends to be directly affected by the oil price strength and the current weakness in oil demand strengthens the USD/CAD.
The greenback’s safe-haven appeal is now in vogue as the global equities sold off after the detection of a new coronavirus strain in London. The mutated virus immediately triggered fears of global-economic-recovery getting scuttled. Even the successful, long-awaited, US fiscal stimulus bill, couldn’t assuage the investors.
The crude oil demand might also get hit as the mutated virus could trigger more lockdowns and travel restrictions. Such a possibility undermined oil prices and the commodity-linked CAD.
Nevertheless, the USD/CAD bulls might not increase their bets as the pair is trading inside the previous day’s trading range. Any up-move will face resistance around 1.2900-1.2910.
The traders will eye the US macro data: final Q3 GDP report, Richmond Fed Manufacturing Index, Conference Board’s Consumer Confidence Index and Existing Home Sales. The releases, along with coronavirus headlines, will drive action in the USD/CAD.
At the time of writing, one US dollar buys 1.2882 Canadian dollars, up 0.20% as of 10:07 AM UTC.