• Multiple factors weigh on USD/CAD.
  • Risk-on bias affects USD.
  • Oil helps the Canadian dollar.

USD/CAD trades around 1.2815 staying weak through the European session after the two-day sideways movement. The pair attracted selling in the Tuesday morning as the US dollar came under pressure from the fiscal stimulus progress, as the House of Representatives voted to spruce up the COVID-19 relief payment to 2,000 dollars from 600 dollars earlier.

The Brexit deal reached between the EU and UK last week also supports the optimistic investor-sentiments. The risk-on mood dragged the US dollar down as its safe-haven status turned less attractive for market participants.

The rise in oil prices strengthened the commodity-linked Loonie and weighed on the USD/CAD.

The oil price rise seems to have been triggered by the hopes of fuel demand increasing due to the US pandemic stimulus. Out of the last four days, the black-gold managed to be in green in three days.

Investors cannot ignore the downside risk after discovering a new coronavirus strain that is more contagious than the earlier one. The mutated virus has triggered widespread fears and forced more lockdowns as well as travel-bans in different countries.

At the time of writing, one US dollar buys 1.2820 Canadian dollars, down -0.18% as of 09:50 AM UTC.