USDCAD higher rose higher as we had mentioned in our forecast yesterday. The pair had closed the last week near the lows of its range on the back of weakness in the dollar. One of the reasons for the dollar weakness was the fact that the US was on a holiday on account of Thanksgiving and hence the liquidity was pretty much low. This was utilised by the dollar bears in pushing it lower and the dovish FOMC minutes also helped the cause.
USDCAD Moves Higher on Dollar Strength
It was widely expected that the dollar would be able to recover to an extent once the traders in the US came back to their desks after the long weekend and went about buying dollars. This is what happened in the markets yesterday as some dull and consolidative trading during the Asian and London sessions gave way to dollar buying during the latter half of the day which helped the USDCAD pair to push through 1.2750 and it trades in that region as of this writing.
The pair was helped in its move higher by the weakness in the CAD as well which was brought about by the weakness in the oil prices. The oil prices fell due to fear that the oil producers may not continue the production cut beyond this year and with the Canadian economy still dependent a lot on the oil prices, the CAD came under pressure due to this as well. This also fuelled the move higher and we believe that some buoyant trading can be seen in this pair as we approach the end of the month.
Looking ahead to the rest of the day, we do not have any major news from Canada but we have a speech from the new Fed Chief Designate Powell which will be watched closely by the markets to gauge whether he would be dovish or hawkish during his term. This could further keep the dollar strong and steady during the course of the day.
This article was originally posted on FX Empire
More From FXEMPIRE:
- AUD/USD and NZD/USD Fundamental Daily Forecast – Fed Speaker Remarks Could Fuel Above-Average Volatility
- Technical Checks For GBP/USD, AUD/USD, NZD/USD & USD/CAD: 28.11.2017
- BoE Reports, Tax Reforms and FED Talk to Drive the GBP and USD
- Concerns Rising for Global Equity Investors
- Bitcoin Cash, Litecoin and Ripple Daily Analysis – 28/11/17
- USD Languishes on US Tax Reform Uncertainty