USD/CAD Slides to Over 5-Month Lows

The USD / CAD weakened further and fell below 1.3300 to the lowest level since February 26 during the European session today. The pair saw some subsequent sell-off during the first half of trading on Wednesday and broke below the monthly support levels in June near the 1.3315 area, and the prevailing bearish sentiment surrounding the dollar was considered one of the most important bearish factors.

The dollar remained low near two-year lows amid fears that the numbers of COVID-19 cases could continue to increase, which would undermine the recovery of the US economy, alongside the impasse in the next round of US fiscal stimulus measures.

Regardless of the weak dollar, the rise in oil prices gave an additional boost to the commodity-linked currency (Canadian dollar), which contributed to the fall of the USD / CAD pair and oil prices continued to receive support from Tuesday’s report that showed a larger-than-expected drop in US crude stocks for the Week Ended July 31.

Later in the session, the US will focus on the ADP and non-manufacturing PMI for July.