As of the start of Wednesday’s European session, the USD/CAD currency pair was hovering around 1.3450. The recent moves of the Loonie pair have been limited by worries about the US government being stuck in a stalemate, fears of covid from China, and a cautious mood before key data or events.

Still, the USD/CAD bulls get excited when the price of Canada’s main export, WTI Crude Oil, goes down. The energy benchmark has gone down for three days in a row. As of press time, it was down 0.85%, or about $87.75.

Aside from that, the US Dollar Index (DXY) shows small gains around 109.70. This is because the latest news about the midterm elections is making people worry that the US government will be paralysed. Fears on the market and the price of USDCAD could also be fueled by news stories about a six-month high in China’s covid number and more lockdowns caused by viruses.

The S&P 500 Futures have trouble keeping up with Wall Street’s gains, while the US 10-year Treasury yields probe bears after breaking a four-day downtrend the day before. Both of these things show how the market feels.

But it should be noted that the pair buyers are worried about Thursday’s US Consumer Price Index (CPI) for October and Tiff Macklem’s speech for the Bank of Canada (BOC). The recent mixed US data and Fedspeak, as well as the BOC’s slowing of rate hikes, could be to blame.

Conclusion

The recent weakness of the USD/CAD pair is shown by a trend line that has been going down for a week.