Listen to the latest market mood for the USDCAD pair.
Asian equity market traded mixed today with the lack of solid conviction after a choppy day on Wall St yesterday where the major indices all finished higher, albeit slipping lower into the close. The Dollar Index is going into the European session relatively flat, but with the EURUSD heading lower at the moment, we would expect more DXY upside today. Given the flat approach in the market today it is best to monitor risk sentiment to wait for a fresh driver.
Keep an eye on the latest coronavirus updates to measure risk and any surprise announcements such as an escalation of a US/China trade war. The mood at the moment is marginally in favour of risk on flows continuing, but that can easily change. As a reminder here are the currencies we can expect to move with risk on and risk off markets:
- Risk off flows= JPY, CHF, USD buying and AUD, NZD, CAD, Equity, selling
- Risk on flows= AUD, NZD, CAD, Equity buying and JPY, CHF, USD selling
For today’s session, if risk off trades start to appear, the USDCAD would offer a good pair for going long. The USD would be bid as a safe haven currency and the CAD would be sold due to its close link with oil. However, keep an eye on latest news flows to gauge risk.