Listen to the latest market mood for the USDCAD pair:

The USD has been weak for two reasons recently. Firstly, a record number of US initial jobless claims show that the US is going to see huge levels of unemployment. Some of those jobs may not actually come back online after the worse of the virus passes. Secondly, the firming up of USD swap lines has reduced dollar demand. However, the USD should strengthen again over the next week as COVID-19 concerns once again grip the market. Medium-term, we expect USD strength to return.

The CAD has been weak on a dire outlook for oil. Falling demand, oversupply, and a Saudi price war have all weakened oil prices by around 45% this month. Canada, with its heavy export oil economy, will find CAD continuing to struggle. Once the market returns to a risk-off footing which, with the rapid spread of COVID-19, it should do soon, we can expect further CAD weakness as oil storage is close to capacity.

• Keep an eye on the latest coronavirus updates to measure risk.
• Expect buyers from market at USDCAD and from 1.3800.

Outlook
We expect this outlook to play out over the next 2-4 weeks.

Trade Risks
The main risk to this setup remains to be any positive coronavirus news which would send the market back into a risk-on mood.