- USD/CAD rejoices broad US dollar demand amid funding distress.
- Oil-price collapse weighs heavily on the Canadian dollar.
- Canadian coronavirus stimulus fails to impress, as focus shifts to US response.
USD/CAD extended its three-day bullish momentum and printed the highest level since January 2016 at 1.4548 in the last minutes, having gained over 350-pips or 2.40% so far this Wednesday.
The main story remains the relentless US dollar demand across the board, as investors run for the world’s most liquid currency, the greenback, in times of the coronavirus outbreak-led market panic and liquidity crunch. The US dollar index trades near a new three-year high of 101.07, up 1.50% on a daily basis.
Further, the spot finds support from the collapse in oil prices that weighs heavily on the resource-linked Loonie. Canada is heavily dependent on oil exports for its revenues. Oil prices sank to fresh 17-year lows amid escalating Saudi-Russia price war and concerns over the global demand growth amid the virus crisis.
Meanwhile, markets paid a little heed to the upbeat Canadian inflation figures, as the US dollar dynamics remain in play. The CAD also shrugged-off the C$ 27 billion stimulus announced to support the domestic households and businesses in such testing times.
The focus now remains on the US economic stimulus package likely to be passed by the Senate later on Wednesday for fresh trading momentum.
USD/CAD technical levels to watch
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