USD/CAD: Eyes 1.2100 mark amid US strength
- USD/CAD stays firmer in the Asian session.
- Upbeat economic data lifts the demand for the US dollar.
- Higher Crude oil, BOC hawkish stance supports loonie.
The USD/CAD pair posted minor gains in the initial Asian session on Monday. The pair continues to consolidate in a very narrow range with no meaningful price action.
At the time of writing, the USD/CAD pair trades at 1.2081, up 0.06% on the day.
The central theme for the market remained economic growth and inflationary pressure. The Upbeat US economic data enhanced the USD valuation that helped USD/CAD to gain some traction lately.
Risk sentiment on escalating tensions between the US and China over the row of origin of the covid-19 virus raises doubts about the political stability in the region, which could further help the greenback to gain on its safe-haven appeal.
On the other hand, the Canadian dollar gained on the rebound in crude oil prices as the global economic growth is expected to fuel energy demand. In addition to that, the Bank of Canada became the first central bank to positively talk about the tapering measures and end of economic stimulus in April. The central bank’s hawkish stance keeps CAD a tad higher against the US dollar.
Meanwhile, the three most populous Canadian provinces, Quebec, British Columbia, and Ontario have announced plans to ease restrictions, which shows confidence in the economy. On the data part, the Inflation rose in April, moving above the central bank’s target range of 1% to 3%.
Having said that, the US Federal Reserve remained unfazed by higher Core Personal Consumption Expenditure data released on Friday. As Fed officials continuously downplayed the inflationary pressure, keeping the US dollar’s gain in check.
Investors are looking for the release of Canadian Current account data for fresh trading impetus.
As for now, the dynamics surrounding the greenback continue to influence the pair’s performance for the time being.
USD/CAD Additional Levels