- USD/CAD rallies over 200 pips from daily lows amid a strong pickup in the USD demand.
- Coronavirus concerns continue to boost the USD’s status as the global reserve currency.
- A strong rally in oil prices did little to underpin the loonie or hinder the strong move up.
A sudden pickup in the USD demand lifted the USD/CAD pair to fresh daily tops, around the 1.4300 mark region during the early North-American session.
Following a modest intraday pullback, the US dollar attracted some dip-buying and was seen as one of the key factors that assisted the pair to recover over 200 pips from an intraday low level of 1.4079.
The greenback buying interest picked up some additional pace in the last hour and seemed unaffected by a surge in the US initial weekly jobless claims, which rose to 6.648 million in the week ending March 28.
Bulls even shrugged off a weaker tone surrounding the US Treasury bond yields, rather boosted the USD’s status as the global reserve currency amid mounting fears over an imminent global recession.
The market worries were evident from a sudden turnaround in the global risk sentiment, which provided an additional boost to the buck’s perceived safe-haven status against its Canadian counterpart.
Meanwhile, strong gains in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie – also did little to hinder the move up, albeit might keep a lid on any further gains.
It will now be interesting to see if bulls are able to capitalize on the momentum and make it through weekly highs, around mid-1.4300s, above which the pair is likely to aim back towards multi-year tops.
Technical levels to watch