- USD / CAD is witnessing some selling on Friday amid a softer tone around the USD.
- Nervousness over the coronavirus should continue to offer support to the safe-haven USD.
- Weaker crude oil prices could weigh on the CAD and help limit deeper losses.
He USD / CAD moves lower during the European session on Friday, falling close to daily lows near the 1.3200 level.
The pair has been unable to capitalize on its initial rally to the 1.3235-40 region and has been met with new selling, retreating from the week-long highs around the 1.3260 region reached on Thursday. The pullback is solely due to a softer tone around the US dollar.
The president of the United States, Donald Trump on Thursday offered to increase the size of a fiscal stimulus package to win support. Republicans and Democrats. This, in turn, provided a modest boosted investor sentiment and weighed on the US dollar safe haven.
However, investors remain skeptical of a deal ahead of the November 3 US presidential election. Further, Concerns about a sharp increase in new coronavirus cases in Europe and the US could continue to provide some support to the USD as a global reserve currency.
Meanwhile, investors remain concerned that Another round of lockdowns to contain the spread of the coronavirus could weaken global energy demand. This is evident from weaker oil prices, which could affect the Canadian dollar, a currency pegged to commodity prices, and help limit the decline in the USD / CAD pair.
Market participants now await release of US monthly retail sales figures Friday’s US economic calendar also features industrial production data and preliminary estimate of the University of Michigan consumer sentiment index for October . This, coupled with broader market risk sentiment, could lead to some short-term business opportunities.
USD / CAD technical levels
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Credits: Forex Street
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