USD/CAD clings to gains above 1.2700 mark, focus remains on FOMC

The USD/CAD pair edged greater via the Asian session and used to be final viewed hovering close to the pinnacle cease of its each day buying and selling range, round the 1.2720 region.

Following the preceding day’s sharp intraday pullback of almost a hundred pips from the 1.2780-85 zone, or over one-week tops, the pair managed to regain traction on Wednesday. The uptick marked the fourth day of a high-quality go in the preceding 5 and was once completely subsidized via a modest pickup in the US greenback demand.

Investors became cautious amid doubts over the timing and measurement of a new stimulus package. The questions arose after Senate Majority Leader Chuck Schumer stated that a complete deal ought to be 4 to six weeks away. Moreover, Republicans have raised objections on the plan’s high-priced fee tag of $1.9 trillion.

This comes amid developing concerns about the attainable monetary fallout from the imposition of sparkling restrictions to curb COVID-19 infections and dampened market mood. The decrease chance urge for food benefitted the greenback’s relative safe-haven popularity and used to be considered as one of the key elements riding the USD/CAD pair higher.

The aiding factor, to some extent, used to be offset by using a nice tone round crude oil prices, which underpinned the commodity-linked loonie and capped beneficial properties for the USD/CAD pair. Investors additionally appeared reluctant to location aggressive bets, as a substitute favored to wait on the sidelines beforehand of the modern FOMC coverage decision.

Apart from this, the broader market danger sentiment and the US stimulus headlines would possibly additionally have an effect on the USD fee dynamics. In the meantime, the launch of US Durable Goods Orders will be appeared upon for some temporary buying and selling possibilities later all through the early North American session.

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