- A combination of factors helped the USD / CAD gain momentum on Monday.
- The climate of risk aversion boosted demand for the dollar as a safe haven.
- Fall in oil prices also pushed loonie down.
He USD / CAD rose throughout the European session and shot to fresh daily highs, around the 1.3186 region, the highest level since October 20. The pair managed to regain a bullish moment on the first day of the week and broke two consecutive days of losing streak.
The pair’s rally was sponsored by a modest pickup in demand for US dollars and the ongoing decline in crude oil prices, which tend to undermine demand for commodity-linked currencies such as the Canadian dollar.
He Greenback saw its demand resurface on Monday amid growing market concerns over rising coronavirus cases in Europe and the United States. On top of this, disappointment over the next round of US fiscal stimulus measures further affected investor sentiment and benefited the USD’s status as a global reserve currency.
Meanwhile, growing concerns about the coronavirus heightened fears of further restrictions and clouded prospects for a rapid recovery in fuel demand. This, together with the prospect of higher supply, led to some weakness in oil prices, which fell by around 3.5%.
However, it remains to be seen if the recent rally will be confirmed in USD / CAD or if there will be a reversal. Investors could refrain from aggressive bets before the last monetary policy meeting of the Bank of Canada (BoC) on Wednesday and the important US macroeconomic data scheduled for this week.
Technical levels
.
Credits: Forex Street
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.
