- USD/CAD cheers broad US dollar weakness to trim the early-day gains.
- Ottawa extends restrictions for foreign nationals’ arrivals until late January.
- WTI remains depressed as OPEC stays indecisive over production hike.
- Second-tier data from the US, Canada will be important while the OPEC+ meeting, risk catalysts to keep the driver’s seat.
USD/CAD stays depressed near 1.2985, down 0.05% intraday, ahead of Monday’s European session. In doing so, the pair benefits from the broad US dollar weakness while ignoring Canada’s extension of the coronavirus (COVID-19)-led restrictions. Additionally, the recent weakness in oil prices, Canada’s biggest exports, also couldn’t defy the sellers.
Public Safety Minister Bill Blair and Health Minister Patty Hajdu crossed wires during the early Monday while announcing the extension of a slew of virus-led restrictions, mainly for the foreign arrivals, to January 21, 2021. It should, however, be noted that the visitors from the US may ignore the stipulations starting from December 21, 2020, if the on-going discussions favor.
The decision to extend the safety measures came in as Canada’s COVID-19 count has recently been rising. Official data suggests an increase of nearly 5,500 cases and 56 deaths during the weekend.
Elsewhere, WTI fails to cheer the OPEC+ leaders’ inability to agree on the production hikes. The oil producers are set to meet on Monday for detailed talks on whether to ease the output cut accord or not. The energy benchmark loses around 1.85% to $44.88 by press time.
It should be noted that the market’s risk-on mood, mainly favored by the vaccine hopes, dragged the US dollar index (DXY) to the lowest since April 2018 during Asia.
Moving on, USD/CAD traders will keep their eyes on the risk catalysts and OPEC+ announcements for fresh impulse. Also, Canada’s Q3 Current Account, Industrial Production and Building Permits will precede the US Chicago Purchasing Managers’ Index and Pending Home Sales to entertain the loonie players.
Technical analysis
A two-week-old falling trend line, at 1.3065 now, restricts the pair’s short-term upside while a line connecting September low to the November 09 bottom, around 1.2905 now, lures the USD/CAD bears.
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