- Canadian dollar underperforming on Wednesday, DXY
- US: Economic data below expectations, FOMC minutes due at 19:00 GMT.
The USD/CAD bounced from the lowest level since April 2018 at 1.2628 to 1.2722, before stabilizing around 1.2700. The pair is modestly higher for the day after a recovery across the board of the US dollar even as Wall Street jumps.
Market participants await the release of the FOMC minutes. The economic report from the US came in below expectation, particularly the ADP employment. On Friday, the NFP is due and also the official labor report in Canada.
The greenback gained momentum despite US data boosted by higher US yields. The moves in the bond market take place after the election for the US Senate. The loonie is also falling versus NZD and AUD amid risk appetite, even as crude oil prices hit fresh highs.
From a technical perspective, the trend in USD/CAD is bearish, but in the very short-term, the bounce from the lows alleviated the downside pressure. A recovery above 1.2735 would offer more support to the dollar that could rose further to test 1.2770. On the flip side, the loonie needs a consolidation below 1.2670 to expose the daily low.
Technical levels
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