- USD / CAD touched a daily high of 1.2648 ahead of the US session.
- The US dollar index extends the rebound to the second day in a row on Wednesday.
- Private sector employment in the US increased more than expected in September.
The pair USD / CAD it closed the previous four trading days in negative territory, but managed to rebound on Wednesday. However, after hitting a daily high of 1.2648, the pair lost its bullish momentum and erased a portion of its daily gains. At time of writing, USD / CAD was up 0.3% on the day at 1.2617.
DXY clings to gains above 94.00
The risk-off market environment, as reflected in the sharp decline seen in major European stock indices, appears to be helping the dollar find demand on Wednesday. The US Dollar Index (DXY), which posted modest gains on Tuesday, rose to a fresh weekly high of 94.44 before declining modestly. Currently, the DXY is up 0.35% to 94.30.
Data released by Automatic Data Processing (ADP) on Wednesday showed private sector employment in the US rose by 568,000 in September, compared with analysts’ estimate of 428,000. However, the market sentiment remains bitter despite upbeat data and S&P futures were last seen down 0.77%.
On the other hand, a barrel of West Texas Intermediate (WTI) is losing more than 1% on Wednesday, making it difficult for the Canadian dollar related to commodities to show resistance against its rivals. Later in the session, the weekly crude oil stock change report from the US Energy Information Administration (EIA) will be examined for fresh momentum.
Meanwhile, the perception of risk is likely to continue to drive financial markets amid the lack of release of high-level data for the remainder of the day.