- USD / CAD is moving firmly higher on Friday, rising more than 100 pips.
- New aversion to risk in the markets due to a new variant of the covid weighs on the CAD.
- The drop in oil prices, due to fears of lower demand due to new restrictions, weighs on the CAD and supports the upward movement of the pair.
The pair USD / CAD moving steadily higher on Friday, rising more than 100 pips and recovering the 1.2750 region. At time of writing, the pair is holding near daily highs around the 1.2765 level.
The upward movement of the pair occurs amid strong risk aversion in the markets, which benefits the safe haven USD and weighs on the May CAD perceived risk.
What’s more, a sharp drop seen in WTI crude oil prices is also weighing on the CAD, currency linked to the prices of raw materials. Oil prices are suffering a dramatic drop on Friday, amid fears of a new variant of COVID. The barrel of WTI yields more than 6% and Brent 5.75%. WTI started the day above $ 78.00 and recently fell to $ 72.65, the lowest level since September 24.
As mentioned, among the catalysts for fear in the markets were talks about the new version of the virus, formally named B.1.1.529, which is linked to South Africa and could be immune to vaccines. The World Health Organization (WHO) has called a special meeting to discuss the new version of the virus and the fears emanating from it to confirm its status as a “variant of concern.”
There will be no major economic data releases for the remainder of the day, so investors’ attention will remain on risk appetite, crude oil prices, and COVID-related news.
USD / CAD technical levels