The USD/CAD pair encountered selling pressure during Thursday’s Asian session, retreating from the overnight recovery gains around the 1.3420 region, its lowest level since March 8. Currently trading around 1.3470-1.3465, the pair is down over 0.10% for the day, influenced by a modest decline in the US Dollar (USD), though falling Crude Oil prices may help limit deeper losses.
The USD Index (DXY) stalled its recent rebound amid expectations for another 50 basis points interest rate cut by the Federal Reserve (Fed) in November. Additionally, a bullish trend in equity markets is undermining the safe-haven USD, further exerting downward pressure on the USD/CAD pair.
Concerns about sustained fuel demand growth in China, coupled with easing supply disruption fears from Libya, have contributed to a decline in Crude Oil prices, moving away from a three-week high reached earlier this week. Despite recent stimulus measures from China, uncertainties about its economic recovery persist, which, along with indications of increased Libyan oil supply, negatively impacts demand for the commodity-linked Canadian Dollar (Loonie).
Traders are likely to remain cautious and avoid aggressive positions ahead of key speeches from influential Federal Open Market Committee (FOMC) members, including Fed Chair Jerome Powell, later in the North American session. Upcoming US economic data will also be crucial in shaping USD demand and creating short-term trading opportunities.
Related Topics:
