- USD/CAD gains positive traction for the second straight day, albeit lacks follow-through.
- Reduced bets for a June Fed rate cut lift the USD to a multi-week top and lend support.
- Bullish Crude Oil prices seem to underpin the Loonie and act as a headwind for the pair.
The USD/CAD pair attracts some buyers for the second straight day on Tuesday and looks to build on the overnight bounce from the 1.3515 region, or over a one-week low. Spot prices currently trade around the 1.3580 area and remain supported by some follow-through US Dollar (USD) buying, though bullish Crude Oil prices might cap any further gains.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, has advanced to its highest level since February 14 in the wake of doubts over whether the Federal Reserve (Fed) will cut interest rates three times this year. Investors trimmed their bets for a June Fed rate cut following the release of the upbeat US data, which showed that the manufacturing sector registered growth in March for the first time since September 2022. This remains supportive of elevated US Treasury bond yields, which, in turn, act as a tailwind for the buck and the USD/CAD pair.
Apart from this, the risk-off impulse turns out to be another factor benefitting the safe-haven Greenback. Meanwhile, Crude Oil prices stand tall near a five-month high touched on Monday amid signs of improved demand and the risk of a further escalation of tensions in the Middle East. This is seen underpinning the commodity-linked Loonie, which, in turn, might hold back traders from placing fresh bullish bets around the USD/CAD pair. Even from a technical perspective, the recent repeated failures to find acceptance above the 1.3600 mark warrant some caution.
Market participants now look forward to the US economic docket – featuring the release of JOLTS Job Openings and Factory Orders later during the early North American session. This, along with speeches by influential FOMC members, the US bond yields and the broader risk sentiment, should rive the USD demand and provide some impetus to the USD/CAD pair. Traders will further take cues from Oil price dynamics to grab short-term opportunities.
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 tests daily lows near 1.0350 on NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in January, dragging EUR/USD to the area of new lows near 1.0350.

GBP/USD flirts with daily lows near 1.2420, Dollar picks up pace
The continuation of the rebound in the US Dollar motivates GBP/USD to accelerates its losses and revisit the 1.2420 area, or daily lows, following the release of US NFP in January.

Gold tests fresh lows near $2,860 after NFP
Gold prices trim their early advance on Friday, deflating to the vicinity of the $2,860 region per ounce troy following the publication of the US labour market report in January.

Key takeaways from the January Payrolls report
The January payrolls number was weaker than expected at 143k, vs a reading of 175k. However, to counteract the downside surprise in the NFP number, the unemployment rate fell to 4% from 4.1%, and average wage data jumped by 0.5% on the month, to 4.1%, the market had been looking for a decline to 3.8%.

Top Trumps: The global economy’s House of Cards
The year has barely started and we are learning the hard way what Donald Trump’s second term in office means for markets, analysts and global policymakers. It's like living through an episode of the political thriller, House of Cards.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.