USDCAD has hit the fresh 3-month low of $1.3049 today on the improved risk appetite and higher oil prices. The pair is targeting psychologically-important $1.30 next.
In the anticipation of the Bank of Canada (BoC) interest rate decision and Fed policy meeting, both this week, the USDCAD has hit the new 3-month low of $1.3049 today. The 5.5% increase in oil prices last week are also helping the CAD to make gains against the majority of other currencies.
The CAD strength is another sign of the improving risk appetite, including higher chances of the US-China trade deal.
“Positive trade headlines continue to support our view that trade tensions are easing. We believe there is a high probability of some trade deal being signed next month, including lowering of existing tariffs,” said Win Thin, global head of FX strategy at Brown Brothers Harriman.
USDCAD is now targeting psychologically-important $1.30 mark next, where two important support levels are located. First, the 2019 low of $1.3015 and then the 161.8% Fibonacci extension, of the $1.3134 – $1.3347 correction higher, is located at $1.3003.