NEWS : USD/CAD sticks to modest recovery gains near 1.3100 handle, lacks follow-through
USD/CAD sticks to modest recovery gains near 1.3100 handle, lacks follow-through
- The USD gains traction in reaction to the US-China trade truce.
- Rallying Oil prices underpin Loonie and cap any strong gains.
- Traders now eye US ISM PMI for some short-term impetus.
The USD/CAD pair gained some positive traction at the start of a new trading week, albeit seemed struggling to extend the uptick further beyond the 1.3100 handle.
A goodish pickup in the US Dollar demand, supported by the US-China trade war truce announced over the weekend, extended some support and assisted the pair to recover a bit further from yearly lows set on Friday.
However, a strong rally in Crude Oil prices – hitting their highest in over five weeks, underpinned demand for the commodity-linked currency – Loonie and turned out to be one of the key factors capping any strong follow-through.
In fact, WTI Oil rallied nearly 3% to levels beyond the $60.00/barrel mark on Monday in reaction to the news that OPEC and its allies are set to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week.
Hence, it would be prudent to wait for a subsequent buying interest before confirming that the pair might have actually bottomed out and positioning for any further meaningful recovery move in the near-term.
Moving ahead, Monday’s US economic docket – highlighting the release of the US ISM manufacturing PMI will now be looked upon for some short-term trading impetus later during the early North-American session.
