USD/CAD trades with negative bias above 1.3800 amid uptick in Oil prices, weaker USD
USD/CAD attracts fresh sellers on Thursday and is pressured by a combination of factors.
The USD bulls remain on the defensive despite the Fed’s hawkish pause on Wednesday.
Renewed buying around Oil prices underpins the Loonie and weighs on the currency pair.
The USD/CAD pair fails to capitalize on the pervious day's modest recovery move from the vicinity of the year-to-date low and meets with a fresh supply during the Asian session on Thursday. Spot prices, however, remain confined in a multi-week-old range and currently trade around the 1.3815 region, down 0.15% for the day.
The US Dollar (USD) continues with its struggle to any meaningful buyers amid the heightened economic uncertainty led by US President Donald Trump's rapidly shifting stance on trade policies. In fact, Trump said that he is in no real hurry to sign any deals and added that he was not open to lowering the 145% tariffs imposed on China to encourage trade negotiations. This, to a larger extent, overshadows the Federal Reserve's (Fed) hawkish pause on Wednesday, which keeps the USD bulls on the defensive and weighs on the USD/CAD pair.
Meanwhile, Crude Oil prices regain positive traction following the overnight pullback from a one-week high and underpin the commodity-linked Loonie. Apart from this, hopes for a new US-Canada trade deal benefit the Canadian Dollar (CAD) and exert some pressure on the USD/CAD pair. However, the OPEC+ decision to speed up output increases stoked fears of oversupply. This, along with demand concerns on the back of fading hopes for a quick resolution to the US-China trade war, should cap any meaningful upside for Crude Oil prices.
This, in turn, makes it prudent to wait for strong follow-through selling before confirming a fresh breakdown for the USD/CAD pair and positioning for an extension of the recent sharp retracement slide from over a two-decade high touched in February. Traders now look forward to the release of the US Weekly Initial Jobless Claims data for some impetus later during the early North American session. Apart from this, Oil price dynamics should contribute to producing short-term trading opportunities ahead of the Canadian jobs report on Friday.
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