USD/CAD bulls take back control

• USD/CAD recovers as oil falls to fresh lows in a risk-off environment.  
• Traders brace for Fed Chair Powell and ex-Fed Chair/current Secretary of the Treasury Yellen.

USD/CAD is currently trading at 1.2560 having moved higher on the day by some 0.32% at the time of writing. The pair travelled between a low of 1.2516 and a high of 1.2594 so far.

The US dollar has picked up a bid despite sinking US yields. The 10-year yield is down some 2.9% on the day while the DXY has advanced by 0.63% to the highest levels of the day at 92.32 so far.  

The safe havens are collecting the flows on Tuesday  as fears about the lasting impact of the coronavirus crisis resurfaced.

The markets are moving away from the euro due to concerns over a third wave of the coronavirus pandemic amid slow vaccine rollouts in Europe which have led to  an extended economic lockdown in Germany.

Germany extended its lockdown until April 18, while Chancellor Angela Merkel called on citizens to stay at home for five days over the Easter holidays.

Adding to market concerns were human rights sanctions on China imposed by the United States, Europe and Britain that prompted retaliatory sanctions from Beijing.

The risk-off flows have hurt the commodities sector with the CRB index down some 2.4% at the time of writing.  

A major contributor to the drop in the index is the rout in oil. WTI is down 5.65% having dropped from a high of $61.33bbls to a low of $57.35bbls in recent trade.

The Canadian dollar was pressured back towards the session lows on the move in oil ahead of Congressional testimony by Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.

Markets will be looking for speakers to shed light on the pace of economic rebound from the pandemic.

In remarks prepared for delivery to the hearing on Tuesday morning, Powell said the US  economic recovery had progressed “more quickly than generally expected”.

The Congressional hearings begin at 12 p.m. ET (1600 GMT).