After Monday’s rebound moves, the USD/CAD takes up bids.
The market’s optimism and OPEC+’s indecision enhance oil prices.
The USD/CAD consolidates Friday’s losses at 1.2340 despite a sluggish Asian session on Tuesday, as questions about the Fed’s moves perplex optimists. The Loonie pair so extends the previous day’s rebound march despite mildly upbeat market sentiment. Strong oil prices, Canada’s biggest export, have posed a recent challenge to the pair buyers.
By the conclusion of Monday, global oil producers had failed to reach an agreement at the last OPEC+ meeting, signaling that the constrained output measures will continue. WTI prices soared above $76.00 for the first time since October 2018.
WTI rises to new cycle highs as OPEC meeting is canceled
In other news, the Bank of Canada’s quarterly Business Outlook Survey revealed that inflation forecasts had improved. However, the USD/CAD exchange rate paid little attention to the publication as the US dollar recovered from Friday’s losses following the mixed US jobs report for June.
Even as the coronavirus (COVID-19) concerns offer intricate information, it’s important remembering that risk appetite has improved recently. While the UK and Germany appear to be positive about future covid circumstances, suspicions of a new virus type, Epsilon, which has shown resistance to vaccines during the initial detection in California, pose a danger to the risk-on mentality.
S&P 500 Futures climb modestly amid these moves, but US 10-year Treasury rates nurse their wounds around 1.43 percent following Friday’s poor performance.
Given the return of US traders after a long weekend, as well as the June ISM Services PMI, USD/CAD may struggle to maintain its rebound advances. Risk triggers and data, on the other hand, are essential for a new jolt of energy.
Read more: ISM Services PMI Predictions: Why the Inflation Component May Lead to a Dollar Rebound
USD/CAD buyers are directed toward the 100-day moving average level of 1.2381 by a nine-day-old rising support line around 1.2330./n
