The USD/CAD pair is just above the lower edge of the day today, standing at 1.2980. The duo has been on the downside throughout this week’s entire trading session. The USD/CAD faces such a downslide as the US Dollar continues to weaken. The Dollar Index (DXY) has slipped below a record low of 92.00 recently and the estimated low of the year is supposed to stand at 91.74 DXY. In the upcoming trading sessions, the USD/CAD is to face losses of just under 30 pips, that is about 0.2%.
USD/CAD Dips Because Of Bearish US Dollar Flows
There has been no Canada based data or news regarding such a downturn as of Friday, November 27. Plus, the trade with crude oil markets has also been broadly subdued. Amidst these pieces of information, it is largely predicted that US Dollar weakening has been the major reason behind the low trading of USD/CAD. To be precise, it seems as though CAD has conformed to the bearish trends of USD flows.
Analysts and experts working behind the value of USD are not surprised with this turn of events. Amidst the global pandemic and the recent US elections, the fate of USD seemed evident. The Stock Market trends also helped forecast this downslide. Analysts further suggest that till now multiple market narratives are working directly against the Dollar value.
Long-Term Might Bring Positive Results But Near-Term Risk Factors Point Towards Bearish Term End
Up until now, stock market trends looked bearish but several markets are turning around beginning November as several good news factors in. to list these out, investors and market participants are looking forward to an improved scenario by early 2021. This happens because of recent vaccine news and Democratic presidential candidate Joe Biden’s win in the US Presidential Elections.
The vaccine news has shed positive light on the stock market, risk-sensitive FX market and commodity markets. It is like a light at the end of a dark tunnel that gives hope of financial stability in the country. USD/CAD value is also expected to improve by 2021 as Joe Biden takes over the White House pointing towards a turning point in global relations and a positive time for international trade.
However, near-term risk factors continue to warn about further implications on the value of USD/CAD. With news of the third wave of the coronavirus pandemic spreading across the nation, the US Economy is to take the toll of it if things go further south. Along with this, the lack of any stimulus package by the end of the year is to add to the fiscal deficiency the country is going through. With these possible risk factors, the upcoming weeks looks bearish for USD/CAD.