The movement of the bearish USDCAD currency pair goes deeper towards the 1.3500 exchange rate ahead of the opening of the European session this Thursday (16/7). The pair experienced a very sharp decline after last night the Canadian central bank held its latest policy meeting without making any changes.
The strengthening of the Canadian Dollar is even more convincing when the US Dollar is in a strong bearish bias. Unfortunately, the decline around WTI is still limiting. But even though USDCAD is deeply bearish, the pair has been able to climb over the past few times and tried to consolidate the decline.
The optimism brought about by the Coronavirus vaccine news cannot seem to last much longer. Because President Trump is planning to return sanctions to key Chinese officials. Seeing this China also seems not to be silent.
The warming relations between the two countries have caused the US Dollar index to become the target of investors. So that brought the US Dollar to rise from the lowest point in the last five weeks.
WTI Weakens Due to Rising US Dollar
The rise of the US Dollar also caused US WTI crude oil futures to register a 0.33% decline to 41.05. With all of this further decline in the USDCAD seems successful to be limited.
From the global market, it seems that the direction of risk is not yet clear, although risk-off tends to dominate thin. Benchmark risk is the yield of US Treasury bonds in the tenor of 10 years down lightly along with shares in the Asian region. This condition also caused the bearish USDCAD to be stopped.
The next pair's movement is predicted to focus on the meeting of the European central bank later in the evening. Then followed the evening session by several releases of economic data from the US such as retail sales and the Fed Fed manufacturing sector survey also became the focus of investors.
The movement of the USDCAD currency pair today recorded a slight increase of about 0.05% when the Asian session took place on Tuesday (7/14). USDCAD bullish longer and is able to be at the exchange rate of 1.3625 and continue to hold above 1.3600 much longer.
With this positive note, the pair has moved better in the last four days without any pause. Unfortunately, the US-China problem and the pandemic still weigh on global risks.
CAD Has Decreased as WTI Moves Down
Indeed, since Monday, global risk sentiment has recovered because of news of the improving global pandemic. Unfortunately, the number of cases in the Asia-Pacific region which is still high causes the risk-off tone to re-strengthen. Current investor expectations come from the Coronavirus drug which will be mass-produced by companies from the United States.
USDCAD's bullish impetus may also come from news about the conflict in the South China Sea region which is returning to heat up. Problems between the United States and China continue to roll even further.
Reporting from Bloomberg said the US would not destroy the Hong Kong Dollar's benchmark. Reuters also reported that Chinese companies will find it difficult to enter the US stock exchange.
Supporting the bullish USDCAD today also came from the decline in the 10-year US Treasury bond yield to 0.615%. But that support was countered by the positive movement of the S&P 500 futures contract, which posted an increase of 0.15%. Meanwhile, broadly Asian stocks also posted a decline due to the risk-off growth.
The weakening of the Canadian Dollar gets an additional burden when WTI crude oil futures still record a decline to 39.42 or around 0.90% today. The next move will focus on Chinese economic data on the trade balance and consumer inflation from the US.
