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The USD/CAD pair has dropped to fresh three-week lows during the New York session, trading at 1.2677. The last trading day of the year has a relaxed market mood; despite that Asian equities closed in the green territories with significant gains.
European stock indices like the CAC40 and the FTSE 100, the only ones open, are down, while US equity futures slide. Thin liquidity conditions and a weaker US dollar across the board boost the prospects of the Canadian dollar, despite US crude oil prices falling around 1%, as investors close their books, aiming towards 2022.
The US central bank hawkish pivot led by Fed’s Chief Jerome Powell, appearing at the congress on November, emphasizing that inflation is no longer transitory, put a lid on the USD/CAD fall, as market participants assess which of the Fed and the Bank of Canada would be the first to pull the trigger hiking rates.
The USD/CAD daily chart depicts the pair as upward biased in the long-term, but a technical break of an upslope trendline drawn from October 2021 swing lows, paves the way for further losses, as CAD bull’s aims for a test of the 50-day moving average (DMA) at 1.2652.
