USD/CAD falls to over 1-week lows amid broad-based USD weakness

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  • USD/CAD failed to capitalize on its early uptick and met with some fresh supply near 1.4275 region.
  • The prevailing bearish sentiment surrounding the USD was seen as a key factor weighing on the pair.
  • The already weaker greenback was further weighed down by the Fed Chair Powell’s latest comments.

The USD/CAD pair dropped to 1-1/2 week lows in the last hour, albeit managed to find some support just ahead of the 1.4100 round-figure mark.

The pair failed to capitalize on its early attempted recovery move to the 1.4275 region, rather met with some fresh supply and has retreated over 150 pips from daily tops, all against the backdrop of persistent selling bias surrounding the US dollar.

The already weaker sentiment surrounding the greenback deteriorated further after the Fed Chair Jerome Powell, in an interview on NBC Today, said that the US central bank still has room for more action to combat coronavirus crisis.

Against the backdrop of the Fed’s unlimited quantitative easing program earlier this week, Powell’s comments exerted some additional pressure on the USD and aggravated the bearish pressure/contributed to the ongoing slide.

With the USD price dynamics turning out to be an exclusive driver of the pair’s momentum, the downfall seemed rather unaffected by some renewed weakness in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie.

Moving ahead, market participants now look forward to the US economic docket, featuring the release of the highly anticipated initial weekly jobless claims and the final Q4 GDP growth figures, for some short-term trading opportunities.

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