USD/CAD extends losses below 1.3600 as US dollar stays offered
- USD/CAD reverses from 1.3602, snaps two-day winning streak.
- US dollar losses its charm amid virus woes, rising equities.
- WTI attempts recovery on the greenback weakness but fails to defy increasing odds of the supply hike.
USD/CAD takes offers around 1.3560/55, down 0.24% on a day, while heading into the European session on Monday. The loonie pair earlier benefited from WTI weakness but failed to cross 1.3600 as the US dollar extends Friday’s losses amid the mildly upbeat session.
The US dollar index (DXY), a gauge of the greenback versus the major currencies, drops over 0.25% to 96.40 by the press time. While increasing odds of the further stimulus propels global markets and diverts funds off the US currency, a sustained surge in the American numbers of the coronavirus (COVID-19) makes it a little appreciable for the world’s largest economy.
With over 66,500 cases, the US continues to lead the global pandemic numbers followed by Brazil and India. The World Health Organization (WHO) cites the macro surge of over 13.00 million in whereas Reuters highlight figures from Florida and Texas to portray the pandemic outbreak in the US. Even so, Trump administration is pushing hard for the schools to re-open while also praising anti-mask rally.
However, markets cheer upbeat signals of further aid packages from the US and the UK, not to forget the Asian quest to combat the virus, to portray the risk-on mood. In doing so, the US 10-year treasury yields seesaw near 0.63% and S&P 500 Futures gain over 0.50% whereas stocks in Asia-Pacific also mark notable gains as we write.
Not everything is positive for the Canadian dollar (CAD) as the nation’s recent rejection to join the US and Mexico in trade talks gains support from the oil price weakness to challenge the currency bulls. WTI trims the early-day losses but stays over 0.75% in red while taking rounds to $40.45 amid increasing calls of further supplies from Saudi Arabia and Iran.
Moving on, a lack of major data/events will keep the traders pushed towards the virus headlines, also news surrounding China, for fresh impetus. However, the quote’s additional weakness depends upon how well the markets manage to extend the latest gains against all odds.
Technical analysis
200-day SMA, currently around 1.3500, becomes the tough nut to crack for the pair sellers.