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USD/CAD retakes 1.3500 and beyond, eyes weekly top amid modest USD strength

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  • USD/CAD scales higher for the second straight day amid sustained USD buying interest.
  • Reduced bets for aggressive Fed policy easing and geopolitical risks underpin the buck.
  • A modest downtick in Oil prices weighs on the Loonie and contributes to the move-up.

The USD/CAD pair attracts some follow-through buying for the second successive day on Thursday and climbs back above the 1.3500 psychological mark during the Asian session. The move up is sponsored by a stronger US Dollar (USD), which continues to draw support from a combination of factors and supports prospects for a further intraday appreciating move. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, advanced to a three-week high amid reduced bets for a more aggressive policy easing by the Federal Reserve (Fed). The markets continue scaling back their expectations for another oversized interest rate cut by the US central bank in the wake of this week's upbeat US data, which pointed to a still resilient labor market. This, along with rising conflicts in the Middle East, further benefits the safe-haven buck, which is seen as a key factor acting as a tailwind for the USD/CAD pair. 



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