The USD/CAD pair is declining during the trading session on Wednesday. Since the opening of the day, the US dollar has lost 0.2% against its Canadian competitor and continues to be quoted at 1.2880. The pressure on the dollar has intensified amid criticism by US President Donald Trump regarding the bill approved by Congress to stimulate the economy hit by the pandemic. According to him, the package worth about $ 900 billion is insufficient to support the population and enterprises. He called on Congressmen to increase direct household payments from $ 600 to $ 2,000. It is worth noting that if a new stimulus package for the US economy does not receive presidential approval by the end of this year, a recession for the US will be almost inevitable.
An additional factor in the depreciation of the USD was the controversial statistics from the United States. According to the updated data on GDP, the growth of the American economy in the third quarter was 33.4% against the forecast of 33.1%. However, after the release of the consumer confidence index, which fell to 88.6 points against the forecast of growth to 97 points, it became obvious that the growth rate in the 4th quarter could be disappointing. The statistics on sales in the secondary housing market were also weak, which amounted to 6.69 million instead of the expected 6.70 million.
Notwithstanding the above, the USD / CAD pair is still holding positions at its highs since the beginning of December and still has the potential for recovery above 1.30. This may be facilitated by the decline in oil prices, which continues for the third day in a row. The pressure on the price of hydrocarbons may be exerted by statistics on changes in oil reserves in the United States. A report from the Energy Information Administration will be released today at 6:30 pm ET. In the event that stocks rise again, Brent quotes may end the current session below $ 49 per barrel. Considering that the price of oil has a decisive influence on the Canadian raw materials economy, the “Canadian” risks sinking after oil. Another factor of CAD weakness may be Canadian GDP data, which will be released today at 16:30 Moscow time. Another weak release will return to the market talk about additional stimulation of monetary policy by the Bank of Canada. In this scenario, the growth of the USD / CAD pair will resume.
USD / CAD BuyLimit 1.2850 TP 1.3050 SL 1.2790
Analytical reviews and comments to them reflect the subjective opinion of the authors and are not a recommendation for trading. Author Artem Deev is a trader analyst at AMarkets . The social network of forex traders is not responsible for possible losses in case of using the review materials
