During Friday’s Asian session, the USD/CAD oscillates between 1.2580 and 1.2590. Despite bank holidays in Canada and the United States, the Loonie pair reclaimed the previous day’s multi-day high.The cause might be tied to the US dollar’s continuous rise on the back of Fed rate hike talk and weak WTI crude oil prices, Canada’s key export commodity. However, traders are wary ahead of the Treasury market’s reopening after a one-day break, as they await US data as well as old catalysts for new momentum.
The United States Dollar Index soared to a 16-month high of 95.1961 before dipping to about 95.1228 after the conclusion of the North American session on Thursday.Inflation in the United States has reached a three-decade high, fueling Fed rate rise worries and favoring the US dollar recently.
In the same vein, the safe-haven attractiveness of the dollar may acquire relevance with growing concerns about China’s economic development, owing primarily to the credit issue for real-estate enterprises and widespread power outages. This is on top of the Sino-American squabbles over the phase 1 deal, Hong Kong and Vietnam impacting on oil prices and adding fuel to USD/CAD pricing.
It is worth mentioning that recent discussions about the US releasing SPR (Strategic Petroleum Reserves) to combat the oil crisis have also challenged WTI bulls and supported the USD/CAD higher.In the middle of these speculations, Wall Street closed along with the US Treasury markets for the vacation. The US Michigan Consumer Sentiment for November, on the other hand, will be watched for fresh impetus as traders return from their vacation.