- USD/CAD slides for the fourth continuous session.
- Risk-on mood weighs on the USD.
- CAD ignores crude-oil consolidation.
The US dollar selling dragged USD/CAD to the levels near two-week low, slightly below mid-1.2700s. The pair’s recent bearishness triggered a slide from above mid-1.2900s and continues for the fourth straight day today. Altogether, the USD/CAD traded in red in five of the last six trading sessions.
The dollar index refreshed its multi-year lows as global risk sentiments turned aggressively bullish on the expectations of an additional US fiscal stimulus, apart from what has been already signed by President Trump into law.
The pro-risk mood also stems from the enthusiasm surrounding AstraZeneca/Oxford COVID-19 vaccine’s regulatory approval and the expectations of a robust economic recovery in 2021.
Meanwhile, oil-linked CAD shrugged off the muted action in the oil prices. The strict lockdown enforced in the UK sedated the recent enthusiasm in the black gold, which now consolidates the recent gains to multi-month highs.
According to analysts watching the price action, USD/CAD prices might have overrun the bounce from the recent lows, and the current slide in the pair is likely to continue for some time.
A low volume environment associated with the year-end holiday mood might arrest any significant downside for now.
In the US economic docket, the Initial Weekly Jobless Claims will garner some attention. Apart from that, the market action will be driven by broad sentiments to produce tradable action in the USD/CAD.
At the time of writing, one US dollar buys 1.2745 Canadian dollars, down -0.05% as of 09:25 AM UTC.