USD/CAD keeps eyes on 1.2580 amid firmer US dollar
|- USD/CAD approaches the 1.2580 level, tracks the movement in the US dollar.
- The optimism surrounding the USD acts as a catalyst for the pair.
- However, recovery in crude oil prices capped the gains.
The USD/CAD pair bounced from the daily lows near the 1.2525 level and staged a recovery of 40 pips in the early European session.
The move is being sponsored by the stronger US dollar and the prevailing risk uncertainties in the markets. At the time of writing, USD/CAD is trading at 1.2565, up by 0.29% on the day.
The pair started the fresh trading week on a positive note by shrugging off Friday’s weakness. The upbeat US economic outlook on behalf of the government support measures and a rapid vaccination drive keeps the US dollar in demand. Fed Chair Jerome Powell in his interview with CBS’s news magazine said that the US economy is at an “inflection point” with stronger growth and hiring, but COVID-19 remains a threat.
The prevailing risk-off mood in global equity indices also benefited the greenback. In the meantime, the recovery in crude oil prices limits losses for the pair. The loonie is directly affected by fluctuations in oil prices.
Investors await the release of the Business Outlook Survey Indicator Q1 data and the BOC Business Outlook Survey for fresh trading opportunities. As for now, the dynamics around the US dollar continue to influence the pair’s prices.
USD/CAD technical levels
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