USD/CAD dives to fresh lows below 1.3525 on a thin market session

The US Dollar has resumed its downtrend against its Canadian counterpart and is exploring fresh intra-day lows sub-1.3525 on the last trading day of the year, with the market in a pre-holiday mood.

The Canadian Dollar ticks up amid a moderate rebound in oil prices

The Lonie is gaining some ground during Friday’s European trading session, underpinned by a milder recovery on crude prices and a sluggish US dollar.

Oil prices have picked up to the $78.50 area on the European morning trade, after bouncing up from session lows at $77.75 earlier today. On a wider perspective, however, crude oil remains trading sideways, weighed by concerns about the demand outlook.

On the other hand, the US Dollar remains on the back foot despite the moderately higher US Treasury bonds. Weekly jobless figures released on Thursday showed a 9,000 increment to 225K in the week of December 24 while the continuous claims rose to 1.71M from 1.669M in the same week, which added pressure on an already soft USD.

USD/CAD is about to close the year with a 7% appreciation

The USD is set to end the year 7% above its opening levels. The pair appreciated steadily through the first half of the year, buoyed by the Federal Reserve’s aggressive monetary tightening path and investors’ concerns about a global economic slowdown.

Over the last months, however, increasing speculation about a recession in the US and hints about a slowdown in the Fed’s monetary tightening cycle has triggered a nearly 3% drop from the 1.3970  two-year high seen in October.

Technical levels to watch