USD Plunges on Risk-On Markets As Canadian Dollar Spikes Due to Crude Oil Price

USD Plunges on Risk-On Markets As Canadian Dollar Spikes Due to Crude Oil Price

The Canadian dollar rose sharply overnight after a strong surge in oil prices, in part due to a strike in Norway that affected 1 million barrels a day of crude oil production. The Canadian dollar is also strongest in the week, awaiting employment data for the next move.

The Yen remains the weakest along with the New Zealand dollar.
However, the dollar isn’t that far away. Some new dollar bears are indeed seen in the Asian session, as the dollar may gain short-term support against other major currencies ahead of the close of the week.

The Canadian dollar strengthened against most of its major currencies in the early US session, helped by stronger-than-expected employment data. This also comes amid strong rise in oil prices this week.

On the other hand, the dollar is under general pressure as global equity markets are back in risk mode.
US Dollar Index Accelerates the Downside to the 93.20 Region
The US Dollar Index (DXY), which measures the dollar against several of its major peers, remains under pressure and moves around 2-week lows in 93.20 zones.

The index falls to multi-session lows in the 93.20 / 15 range at the end of the week in a context favorable for riskier assets, especially after recent news that US politicians may resume negotiations on another stimulus bill.

The DXY has almost completely reversed a bullish attempt made in mid-September and threatens to continue the downtrend if the 55-day SMA (93.29) is sustainably broken.

The index appears to be moving into a consolidation phase, always below key 94.00 barriers. However, occasional bullish attempts on the DXY are (still) seen as temporary, as the underlying sentiment against the dollar ranges from cautious to bearish.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.