USD/CAD climnbs above 1.2560 as focus shifts to US Treasury note auctions

• USD/CAD is edging higher following a two-day slide.  
• BoC’s Business Outlook Survey highlights an improved outlook.  
• Investors await 3-year and 10-year US Treasury note auction.  

The USD/CAD pair edged lower to 1.2530 area during the European trading hours but didn’t have a difficult time recovering its losses. As of writing, the pair was up 0.26% on a daily basis at 1.2561. Nevertheless, the lack of fundamental drivers suggests that the pair is staging a technical correction after posting losses on Thursday and Friday.

Eyes on US T-note auctions

In its Business Outlook Survey for the first quarter, the Bank of Canada (BoC) said that the business sentiment continued  to improve and noted that many firms consider the impact of the coronavirus on their activities is already behind  them. However, the BoC’s optimistic tone failed to help the CAD gather strength against its rivals.

On the other hand, the US Dollar Index is staying relatively calm above 92.00 as investors seem to be staying on the sidelines while waiting for the 3-year and the 10-year US Treasury note auctions later in the session.

Meanwhile, the barrel of West Texas Intermediate (WTI) is rising nearly 2% on the day at $60.45, possibly helping the commodity-related loonie limit its losses for the time being.  

There won’t be any macroeconomic data releases in the remainder of the day and US T-bond yields could impact the greenback’s market valuation.

Technical levels to watch for