- USD/CAD lacked any firm directional bias and remained confined in a range.
- Fading odds of negative Fed rates and the risk-off mood benefitted the USD.
- A goodish pickup in oil prices underpinned the loonie and capped the upside.
The USD/CAD pair was seen oscillating in a narrow trading band around the 1.4100 mark and consolidated its recent gains to weekly tops. A combination of diverging forces failed to provide any meaningful impetus to the pair and led to a subdued/range-bound trading action through the early European session on Thursday.
The US dollar remained well supported by the fact that the Fed Chair Jerome Powell, in a highly anticipated speech on Wednesday, rejected the idea of negative interest rates. This comes amid fears over the second wave of coronavirus infections and fading hopes about a quick economic recovery. This, in turn, weighed on investors' sentiment and further benefitted the greenback's perceived safe-haven status.
On the other hand, the commodity-linked loonie was underpinned by a goodish pickup in oil prices, now up over 2% for the day. Oil prices edged higher on Thursday amid the latest optimism over Saudi Arabia's commitment to further deepen production cuts in June and an unexpected decline in the US crude inventories. The US Energy Information Administration (EIA) reported a 745,000-barrel decrease in inventories.
It will now be interesting to see if the pair is able to gain any meaningful traction or the lack of any fresh buying suggests that this week's strong positive move of over 200 pips from the 1.3900 mark might have already run out of the steam.
Moving ahead, market participants now look forward to the US Initial Weekly Jobless Claims, which might influence the USD price dynamics. This coupled with the release of the BoC Financial System Review and a scheduled speech by the BoC Governor Stephen Poloz should produce some meaningful 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
EUR/USD steadies above 1.0600, awaits German ZEW and Powell speech
EUR/USD is holding above 1.0600 in the European morning on Tuesday, having hit fresh five-month lows. The pair draws support from sluggish US Treasury bond yields but the rebound appears capped amid a stronger US Dollar and risk-aversion. Germany's ZEW survey and Powell awaited.
GBP/USD stays below 1.2450 after UK employment data
GBP/USD trades marginally lower on the day below 1.2450 in the early European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate in February rose to 4.2% from 4%, weighing on Pound Sterling.
Will Gold reclaim $2,400 ahead of Powell speech?
Gold price consolidates the rebound below $2,400 amid risk-aversion. Dollar gains on strong US Retail Sales data despite easing Middle East tensions. Bullish potential for Gold price still intact on favorable four-hour technical setup.
SOL primed for a breakout as it completes a rounding bottom pattern
Solana price has conformed to the broader market crash, following in the steps of Bitcoin price that remains in the red below the $65,000 threshold. For SOL, however, the sensational altcoin could have a big move in store.
Key economic and earnings releases to watch
The market’s focus may be on geopolitical issues at the start of this week, but there is a large amount of economic data and more earnings releases to digest in the coming days.