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  • USD/CAD consolidates daily losses near 1.3050 in late American session.
  • US Dollar Index stays below 93.00 ahead of FOMC’s policy announcements.
  • WTI’s losses keep CAD’s gains limited on Thursday.

The USD/CAD pair slumped to its lowest level since early September at 1.3026 on Thursday and seems to have gone into a consolidation phase in the late American session. As of writing, the pair was down 0.7% on a daily basis at 1.3050.

USD struggles to stage a meaningful recovery

The risk-on market environment made it difficult for the greenback to find demand and caused the US Dollar Index (DXY) to fall sharply. With former Vice President Joe Biden inching closer to a victory in the presidential race, the DXY slumped to its lowest level in more than two weeks at 92.48.

Ahead of the FOMC’s policy announcements, the DXY erased a small portion of its daily losses and was last seen losing 0.77% on the day at 92.75.

Previewing the FOMC’s November meeting, “if the final Congressional election results show a divided Congress, we expect the Fed to increase its bond-buying pace but probably not until after the meeting or at the December meeting,” said Danske Bank analysts. “Still, the risk is that the Fed turns more dovish than in September when it did not do much.”

Federal Reserve Preview: Forecast from nine major banks.

Meanwhile, after a three-day rally, crude oil reversed its direction on Thursday and seems to be limiting the commodity-sensitive loonie’s gains. At the moment, the barrel of West Texas Intermediate is down nearly 1% on the day at $38.75.

Technical levels to watch for