USD/CAD clings to strong intraday gains, around mid-1.4400s
- USD/CAD caught some fresh bids and recovered a major part of Friday’s downfall.
- Crude oil prices tumbled to the lowest level since 2003 and undermined the loonie.
- The USD remained supported by the global dash to cash and remained supportive.
The USD/CAD pair maintained its strong bid tone through the early European session and is currently placed near the top end of its daily trading range, around mid-1.4400s.
The pair caught some fresh bids on the first day of a new trading week and built on the previous day's strong intraday bounce of around over 170 pips. A fresh leg down in crude oil prices undermined demand for the commodity-linked currency – the loonie and turned out to be one of the key factors behind the pair's positive move.
Against the backdrop of the ongoing price war between Saudi Arabia and Russia, oil prices plunged to their lowest level since 2003 in reaction to the fact that an anticipated deal between OPEC and the US failed to materialize. This comes on the back of growing market concerns over a global supply glut and exerted some fresh pressure on oil prices.
On the other hand, the US dollar witnessed some selling on Monday in the wake of the US Senate’s failure to pass the COVID-19 rescue package bill. This coupled with a risk-off environment-led slide in the US Treasury bond yields exerted some additional pressure on the greenback and seemed to be the only factor capping additional gains for the major.
Meanwhile, persistent worries about the economic fallout from the coronavirus pandemic continued lending some support to the USD's status as the global reserve currency and helped recover a part of its early losses. This eventually support prospects for a further near-term appreciating move, albeit overbought conditions warrant some caution for bullish traders.
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