- USD/CAD witnessed some selling for the second consecutive session on Thursday.
- The risk-on mood weighed on the safe-haven USD and exerted some pressure.
- Rallying crude oil prices underpinned the loonie and added to the weaker tone.
The USD/CAD pair remained depressed through the early North American session and was last trading around the 1.3245-40 region, just above three-week lows set earlier this Thursday.
A combination of factors continued exerting some pressure for the second consecutive session and dragged the USD/CAD pair further away from weekly tops, around the 1.3340 region. The prevalent risk-on mood – supported by the renewed hopes for additional US fiscal stimulus measures – dented the US dollar’s relative safe-haven status against its Canadian counterpart.
The greenback was further pressured by a fresh leg down in the US Treasury bond yields and failed to gain any respite from Thursday’s disappointing US weekly jobless claims. Adding to this, the US President Donald Trump declined to participate in a virtual debate, which added to the political uncertainty and did little to lend any support to the buck.
Meanwhile, a strong rally in crude oil prices, now up around 3% for the day, underpinned the commodity-linked currency – the loonie. This, in turn, further contributed to the offered tone surrounding the USD/CAD pair, though the downtick lacked any strong follow-through selling, at least for the time being.
It will now be interesting to see if the USD/CAD pair is able to attract any buying at lower levels or continues with its recent pullback from the 1.3420 supply zone. The focus now shifts to Canadian monthly employment details, scheduled for release during the early North American session on Friday.
Technical levels to watch
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