- USD / CAD saw some selling for the second consecutive session on Monday.
- Market optimism and US political uncertainties weighed on the dollar as a safe haven.
- Softer oil prices undermined the loonie and could help limit deeper losses for now.
The pair USD / CAD it traded with a slight negative bias during the early North American session and was last seen hovering near the lower end of its daily range around the 1.3165-75 region.
The pair added to the losses of the previous session and remained depressed for the second consecutive session on Monday. The drop was exclusively sponsored by some renewed sales of US dollars, although the drop remains muffled amid a softer tone around oil prices.
Revival of hopes for a U.S. fiscal stimulus package, coupled with expectations for a vaccine for the highly contagious disease coronavirus by the end of this year, triggered a sharp spike in risk in equity markets. This, in turn, hurt the dollar’s relative safe-haven status.
It’s worth recalling that House Speaker Nancy Pelosi said Sunday that differences remain with the administration of US President Donald Trump over a comprehensive coronavirus aid package. However, he was optimistic that the legislation could be passed before election day.
Apart from this, the uncertain political situation in the United States further affected the dollar. With about two weeks to go until the November 3 presidential election, Trump and his Democratic challenger Joe Biden will debate for the last time on Thursday, which could instill some volatility in the market.
Meanwhile, a strong rally in US Treasury yields failed to impress the USD bulls or provide any significant boost to the USD / CAD pair. However, a modest drop in oil prices undermined the commodity currency – the loonie – and could help limit deeper losses, at least for now.
There is no major economic data to move the market due to its release on Monday. This makes it prudent to wait for a strong selling follow-up before traders begin to position themselves again for the resumption of the recent downward trajectory of the USD / CAD pair from levels above 1.3400.
Credits: Forex Street

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