- Canadian dollar losses momentum versus dollar drops against AUD and NZD on risk appetite.
- USD/CAD continues to be unable to move away from 1.2650.
The USD/CAD rose more than fifty pips from the five-day low it reached earlier on Tuesday at 1.2589. It is back near the 1.2650 area, modestly lower for the day. The rebound took place amid a recovery of the US dollar and also as US yields move to the upside.
A decline in yields triggered a correction of the US dollar across the board on Tuesday. The DXY dropped from monthly highs above 92.50 to 92.00 and is at 92.10, moving of lows. Equity prices in Wall Street are sharply higher. The Dow Jones gains 0.82% and the Nasdaq 3.12%. The optimism in US markets did not boost the demand for commodity currencies.
In the bond market, the US 10-year yield is at 1.556%, at the highest level since early European hours. The rebound in yields helped the dollar trim losses. Also, gold and silver pulled back over the last hour.
USD/CAD back to its actual gravity area
The pair is now back at the 1.2435/50 area, where it has closed over the last seven trading days. Every run above or below has been unable to hold for USD/CAD. The mentioned area continues to be like a field of attraction. That zone also contains the 20-day moving average.
A consolidation below 1.2600 would point to further losses, while on the upside above 1.2700 should open the door to more gains.
USD/CAD daily chart