- USD / CAD has struggled to capitalize on the initial positive move to the 1.3175-80 region.
- A modest pickup in USD demand is seen as a key factor lending some support to the pair.
- A good rally in oil prices benefits the CAD and limits the pair’s further gains.
The pair USD / CAD has returned initial gains and has fallen to new daily lows, around the 1.3135 region, at the start of the European session on Thursday.
The pair has built on the strong rebound of the previous day, from the six-week lows, and has gained traction to the upside during the first half of trading action on Thursday. The momentum came from a modest pickup in demand for the US dollar, supported by a weaker tone around the stock markets.
Global risk sentiment has been affected by lower hopes for fiscal stimulus measures American before the elections. The latest optimism has faded rather quickly after US President Donald Trump accused Democrats of being unwilling to reach an acceptable compromise on the stimulus.
Meanwhile, the Speaker of the House of Representatives, Nancy Pelosi, acknowledged that the measures could now be approved before the presidential elections on November 3. Investors also doubt the ability of the United States Congress to overcome strong opposition from Senate Republicans to a larger stimulus bill.
The rebound, however, has petered out and The USD / CAD pair has found new selling near the 1.3175-80 region. A positive rally in crude oil prices has benefited the loonie, a currency linked to commodity prices, and has been seen as a key factor that exerts some pressure on the pair.
The drop appears limited, at least for now, as investors await further updates on the next round of US fiscal stimulus measures. Aside from this, the final presidential debate between Trump and Democratic candidate Joe Biden could also instill some volatility.
Investors are likely to turn their attention to Thursday’s release of US weekly initial jobless claims data.This, along with broader market risk sentiment, will influence USD price dynamics. And it could generate some short-term business opportunities.
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.
