- USD/CAD regained positive traction on Wednesday amid a modest uptick in the USD demand.
- The prevalent cautious mood around the equity markets benefitted the safe-haven greenback.
- An uptick in oil prices underpinned the loonie and capped gains ahead of the FOMC decision.
The USD/CAD pair edged higher through the Asian session and was last seen hovering near the top end of its daily trading range, around the 1.2720 region.
Following the previous day's sharp intraday pullback of nearly 100 pips from the 1.2780-85 zone, or over one-week tops, the pair managed to regain traction on Wednesday. The uptick marked the fourth day of a positive move in the previous five and was exclusively sponsored by a modest pickup in the US dollar demand.
Investors turned cautious amid doubts over the timing and size of a new stimulus package. The questions arose after Senate Majority Leader Chuck Schumer said that a comprehensive deal could be four to six weeks away. Moreover, Republicans have raised objections on the plan's expensive price tag of $1.9 trillion.
This comes amid growing worries about the potential economic fallout from the imposition of fresh restrictions to curb COVID-19 infections and dampened market mood. The lower risk appetite benefitted the greenback's relative safe-haven status and was seen as one of the key factors driving the USD/CAD pair higher.
The supporting factor, to some extent, was offset by a positive tone around crude oil prices, which underpinned the commodity-linked loonie and capped gains for the USD/CAD pair. Investors also seemed reluctant to place aggressive bets, rather preferred to wait on the sidelines ahead of the latest FOMC policy decision.
Apart from this, the broader market risk sentiment and the US stimulus headlines might also influence the USD price dynamics. In the meantime, the release of US Durable Goods Orders will be looked upon for some short-term trading opportunities later during the early North American session.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD posts gain, yet dive below 0.6500 amid Aussie CPI, ahead of US GDP
The Aussie Dollar finished Wednesday’s session with decent gains of 0.15% against the US Dollar, yet it retreated from weekly highs of 0.6529, which it hit after a hotter-than-expected inflation report. As the Asian session begins, the AUD/USD trades around 0.6495.
USD/JPY finds its highest bids since 1990, approaches 156.00
USD/JPY broke into its highest chart territory since June of 1990 on Wednesday, peaking near 155.40 for the first time in 34 years as the Japanese Yen continues to tumble across the broad FX market.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.