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The USD/CAD pair is dragged downwards during the American session as US stocks surge and crude oil price jumps. The pair dropped to 1.2899, hitting the lowest level in a week.
The mixture of improved risk appetite, higher crude oil prices and a softer dollar do drag the pair downwards on Friday. Analysts at MUFG Bank warn the Canadian dollar could be hurt more than other currencies by intensifying global growth concerns and from negative spill-over risks from higher rates.
The decline in US Consumer Sentiment to record did not stop Wall Street’s rally. The Dow Jones is rising by 2.12% and the Nasdaq by 2.14%. The improvement in market sentiment is also pushing crude oil price higher. The WTI barrel is at multi-day up almost 4%.
On Thursday, USD/CAD was testing the critical resistance around 1.3000. It failed to break higher and pulled back. Currently, it trades under the 1.2900, a relevant support. A consolidation below could make the pair open for an extension of the move lower targeting initially 1.2860.
