- USD / CAD has been pushing lower in recent trading and recently fell below 1.2650.
- The weak dollar and strong loonie amid risk appetite and strong crude oil prices have fueled the move.
The USD / CAD it continues to push lower and recently crossed below 1.2550 as bears point to a move back to the 1.2500 level and then to test recent multi-year lows at 1.2465. Currently, the USD / CAD is trading lower, losing 0.6% or around 80 pips in the session. On the week, that means the pair is down 0.9% or nearly 120 pips; if USD / CAD closes at current levels, that would be the worst week for the pair since November.
Performance of the day
The pair is trading primarily on the bearish USD sentiment (the USD index has dropped below 91.50 after hitting previous highs at 91.80) and comments from BoC Governor Lawrence Schembri do not appear to have affected sentiment much. Meanwhile, the CAD also appears to have ignored comments from an expert panel warning the government that Ontario could be facing a third wave of Covid-19 amid the accelerating spread of new Covid-19 variants.
Traders have been selling the US dollar amid a lack of demand for safe-haven assets and flows to risk-sensitive assets (such as CAD) after US President Joe Biden enacted the US stimulus package. 1.9 $ T a day earlier than expected, and rumors regarding Biden’s upcoming infrastructure-focused stimulus package are gaining traction. Crude oil markets have performed particularly well, helping the loonie to be one of the best in the G10.
Going forward, the loonie will take over as the main driver of USD / CAD direction on Friday amid the release of StatsCan’s highly anticipated February Labor Market Report; The Canadian economy is expected to have added 75,000 jobs in the month, enough to bring the unemployment rate back to 9.2% from 9.4% in January.
Technical levels
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