USD/CAD reverses an early dip to 1.3300 mark, back near 1-month tops
- Firming Fed rate cut expectations continued to weigh on the US Dollar.
- Weaker oil prices undermined the Loonie and helped limit the downside.
The USD/CAD pair reversed an early dip to the 1.3300 neighbourhood and is currently placed at session tops, well within the striking distance of one-month high set last Thursday.
As investors looked past Friday's mixed US monthly jobs report, a goodish pickup in the US Treasury bond yields extended some support to the US Dollar and turned out to be one of the key factors lending some support to the major.
Weaker oil prices remain supportive
It is worth reporting that the latest US employment details showed that the US economy created less-than-expected 136K jobs in September and the unemployment rate unexpectedly dropped to a near 50-year low level of 3.5%.
However, the prevalent weaker sentiment around Crude Oil prices continued undermining demand for the commodity-linked currency – Loonie and helped limit any deeper losses rather assisted the pair to regain some traction on Monday.
Oil prices continued to be weighed down by fears that the global economic slowdown will weigh on future demand growth and receding optimism over progress in the US-China trade talks, especially after reports indicated that China wants the scope of any deal to be narrow.
The uptick, so far, lacked any strong bullish conviction amid growing speculations that the Fed will cut interest rates further at its upcoming policy meeting in October. Hence, Monday’s scheduled speech by the Fed Chair Jerome Powell might play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
