- The USD / CAD struggled for a firm direction and remained confined to a range on Wednesday.
- The bulls have shrugged their shoulders from a modest recovery in demand for USD and the moderation in the action of crude oil prices.
- Investors are now eagerly awaiting reports from the Canadian CPI and FOMC meetings for fresh impetus.
The USD / CAD pair had no firm directional bias and oscillated between lukewarm gains / minor losses at the start of Wednesday’s European session. The pair was last seen below the middle of 1.3900, well above the three-week lows set on Tuesday.
Reports that the US drug maker Moderna had not provided sufficient data to determine the effectiveness of the vaccines questioned a potential vaccine against the deadly virus. This, in turn, forced investors to take refuge in the safe haven US dollar and prompted a short hedge movement around the USD / CAD pair.
Meanwhile, moderate action around crude oil prices had little influence on demand for the commodity-linked loonie, although it remained supportive of the overnight recovery of the pair. ” about 100 pips. The bulls struggled to take advantage of the momentum and did not seem impressed by a slight recovery in demand for USD.
At the same time, a strong recovery in US equity futures, combined with lower yields on US treasury bills, dampened any strong positive movement in the US dollar. This seemed to be the only factor preventing investors from placing bullish bets and did not help the USD / CAD pair gain significant traction.
Going forward, market participants now eagerly await Wednesday’s economic update, highlighting the release of Canadian consumer inflation figures. This will be followed by the publication of the minutes of the last FOMC meeting, which could generate short-term trading opportunities.