- USD/CAD finds bids near 1.3900 as oil price recovers strongly.
- The market mood remains one of risk aversion pending the Fed’s policy.
- In October, fresh US private payrolls were 113,000, missing expectations of 159,000.
The pair USD/CAD faces selling pressure near the resistance of the round 1.3900 level in the early hours of the American session. The pair remains subdued as the strong recovery in oil prices has strengthened the Canadian dollar.
Oil prices rebounded sharply as the Israeli defense forces (IDR) entered Gaza for a full-scale invasion, raising fears of Iranian intervention in the Israel-Palestine conflicts. If Iran intervenes, the oil supply chain will be significantly disrupted. It should be noted that Canada is the main exporter of oil to the United States and the rise in oil prices supports the Canadian dollar.
Market sentiment is bearish as investors await monetary policy from the Federal Reserve (Fed). According to CME’s Fedwatch tool, the decision to keep interest rates unchanged in the 5.25-5.50% range is safe. However, hawkish guidance is expected due to strong consumer spending and strong labor market conditions.
The US Dollar Index (DXY) is approaching the crucial resistance of 107.00 despite weak US private payrolls data for October. The US Automatic Data Processing (ADP) reported that employers hired 113,000 job seekers, below expectations of 159,000, but significantly higher than the previous reading of 89,000.
Regarding the Canadian dollar, Bank of Canada Governor Tiff Macklem stated that the central bank continues to assess whether monetary policy is sufficiently restrictive and is willing to do whatever is necessary to restore price stability.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
