USD/CAD retreats from yearly highs near 1.3000 as USD softens
- USD/CAD edges lower in the Asian trading hours on Monday.
- US Dollar Index stands tall above 93.50 amid reduced risk appetite.
- The Canadian dollar is under selling pressure on sour risk sentiment.
After testing the yearly highs near 1.3000 in the overnight session, the USD/CAD pair continues to remain strong.
At the time of writing, USD/CAD is trading at 1.2818, down 0.02% for the day.
The US Dollar Index (DXY), which tracks the performance of the greenback against the six major currencies, stays strong near 93.50 in the wake of Fed taper’s talk.
On the other hand, the Canadian dollar was weighed down by risk-off sentiment amid rising coronavirus cases.
Investors rushed to the safe-haven assets after US Fed officials agreed on reducing back monetary stimulus in the latter part of the year.
The Canadian dollar was weighed down by the weaker Retail Sales data, which slightly missed expectations with a 4.2% rise in June.
Oil Prices recovers from the lower levels to trade near $63, which capped the downside for the loonie. Oil is one of Canada’s major export commodities.
As for now, traders are waiting for the US Markit Manufacturing Purchase Managers Index (PMI) and Existing Home Sales data to trade fresh trading impetus.