USD/CAD Struggles Near Three-week Lows

The USD/CAD pair remained depressed during the early North American session. It last traded in the 1.3245-40 region, just above the three-week lows set earlier on Thursday.

A combination of factors continued to pressure the second consecutive session and pushed the USD/CAD pair away from the weekly highs around the 1.3340 region. The prevailing climate of risk appetite, supported by renewed hopes of additional US fiscal stimulus measures, took a toll on the US dollar’s relative safe-haven status against its Canadian counterpart.

Further downward stretch in US Treasury yields pressured the US dollar. Besides, the country could not get any rest from disappointing weekly jobless claims.

Donald Trump, the president of The United States, refused to participate in a virtual debate. It increased political uncertainty and did little to support the dollar.

Meanwhile, a sharp rally in crude oil prices, now up about 3% on the day, sustained the commodity-linked currency: the Canadian dollar. This, in turn, further contributed to the tone offered around the USD/CAD pair, although the bearish streak lacked a strong follow-up sell, at least for the time being.

WTI prices rose above 41 US Dollar

The increase in crude oil prices boosted the Canadian dollar. The US has experienced a sharp decline in its oil production. The country’s offshore Gulf of Mexico was hit by a tremendous blow of the Delta Hurricane. It halted most of the region’s oil and around 2/3 of its natural gas output. US oil production has dropped by more than 1.5 million barrels a day. As a result, WTI shot higher and gained around 3% of its value.

Tiff Macklem, Bank of Canada Governor, said they were not actively discussing negative interest rates, adding that they could expand monetary tools if necessary. However, these comments were largely ignored by market participants.