- USD/CAD came under some renewed selling pressure on Thursday amid softer USD.
- A modest pullback in oil prices undermined the loonie and helped limit the downside.
- Holiday-thinned liquidity conditions also held traders from placing fresh bearish bets.
The USD/CAD pair edged lower during the early North American session and was last seen trading near the lower end of its daily range, just below the key 1.3000 psychological mark.
The pair failed to capitalize on the previous day's modest bounce from over two-week lows, instead met with some fresh supply on Thursday and was pressured by a softer tone surrounding the US dollar. Optimism over the development of a COVID-19 vaccine, along with clarity on the US political front and softer US macro data dragged the USD to its lowest level in more than two months.
It is worth recalling that President-elect Joe Biden was formally given a go-ahead to start his transition to the White House. This comes on the back of the progress on remedies for the highly contagious coronavirus disease and boosted investors' confidence. This, in turn, was seen as one of the key factors that continued denting the greenback's safe-haven status.
Apart from this, the greenback was further pressured by Wednesday's data, which showed that the number of Americans filing for unemployment insurance unexpectedly jumped to 778K last week. The downbeat report suggests that imposition of new COVID-19 restrictions was undermining the labor market recovery and further fueled speculations for additional easing by the Fed.
Meanwhile, the minutes of the November 4-5 FOMC meeting revealed that policymakers debated a range of options to tweak the bond-buying program to support the economic recovery. Participants also judged that an update on its guidance for asset purchases was needed fairly soon and noted the committee could provide more accommodation, if appropriate.
However, a modest pullback in crude oil prices undermined the commodity-linked currency – the loonie – and extended some support to the USD/CAD pair, at least for the time being. Moreover, relatively thin liquidity conditions on the back of the Thanksgiving holiday in the US further warrant some caution for bearish traders and positioning for any further downside.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.