- A combination of factors triggers new selling around USD / CAD on Wednesday.
- Concerns about the increase in COVID-19 cases in the US continue to weigh on the USD.
- A modest rebound in oil prices benefits the CAD ahead of Canadian inflation data.
The selling bias in the USD has accelerated at the start of the European session on Wednesday, dragging the USD / CAD pair to the lower end of its weekly range, around the 1.3070 region.
The pair has not been able to capitalize on the positive movement of the previous day and has been witnessed some new selling on Wednesday, pressured by a weaker tone around the US dollar. Despite the latest optimism around promising vaccine trials, investors remain concerned about the Possible economic consequences of the imposition of new restrictions due to the coronavirus in several US states. This, in turn, has kept USD bulls on the defensive and has been seen as a key factor putting pressure on the USD / CAD pair.
Apart from a weaker dollar, a modest rebound in crude oil prices has benefited demand for the loonie, currency linked to commodity prices, which has further contributed to the intraday decline in the USD / CAD pair. Oil prices remain steady backed by hopes that OPEC and its allies will delay a planned increase in production. This has helped offset fears about reduced demand for fuel due to the continued rise in new COVID-19 cases and the previous day’s API report, which showed US crude stocks rose more than expected, at 4.2 million barrels last week.
Meanwhile, the decline remains supported, at least for the time being, as investors now await the release of the Latest Canadian Consumer Inflation Figures for New Boost. The data is expected to be released at the start of the American session, which, along with a speech scheduled by Bank of Canada (BoC) Chief Deputy Governor Carolyn Wilkins, will influence the Canadian dollar.
Wednesday’s US economic calendar features the release of housing market data, with building permits and home starts. Aside from this, events surrounding the coronavirus saga and broader market risk sentiment could contribute to generating some short-term business opportunities.
USD / CAD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
