- A goodish pickup in the US bond yields helped revive the USD demand on Wednesday.
- An intraday pullback in Crude Oil prices undermined the Loonie and remained supportive.
- Investors now look forward to the US ADP report to grab some short-term opportunities.
The USD/CAD pair built on its goodish intraday bounce from over two-week lows and climbed to fresh session tops, around mid-1.3200s in the last hour.
Following the previous session’s sharp intraday pullback and a subsequent slide to the 1.3200 neighbourhood on Wednesday, the pair managed to regain strong positive traction since the early European session and was being supported by some renewed US Dollar buying interest.
Renewed USD buying/pullback in Oil prices supportive
As investors looked past Tuesday’s disappointing US manufacturing data, which fueled speculations for yet another interest rate cut by the Fed in October, a goodish pickup in the US Treasury bond yields turned out to be one of the key factors lending some support to the USD.
It is worth recalling that the US ISM manufacturing PMI fell to 47.8 in September and bolstered fears of a US recession. The reading marked the worst level since June 2009, largely offsetting softer Canadian GDP print, and prompted some aggressive long-unwinding trade around the major.
Meanwhile, the latest leg of a sudden spike over the past hour or so could further be attributed to an intraday pullback in Crude Oil prices, which undermined demand for the commodity-linked currency – Loonie and remained supportive of the pair’s intraday positive move.
Market participants now look forward to the US economic docket, highlighting the release of ADP report on private-sector employment and weekly Crude Oil inventories data, which might produce some meaningful trading opportunities later during the North-American session.
Technical levels to watch
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