USD/CAD hits 6-month low as hopes of US stimulus deal fade
- USD/CAD drops to levels last seen in February.
- The US fiscal impasse keeps the dollar under pressure.
USD/CAD fell to six-month lows on Thursday as fading hopes for additional US fiscal stimulus kept the greenback under pressure.
The pair clocked a low of 1.3227 during the Asian trading hours. That level was last seen on Feb. 21.
Focus on US fiscal impasse
Republicans and Democrats remain deadlocked over additional stimulus for the US economy on Wednesday. President Trump accused Congressional Democrats of not wanting to negotiate the aid package as both sides traded blames for the five-day delay in talks over relief regulation, as noted by Reuters.
The coronavirus outbreak has taken a heavy toll on the US economy and without additional stimulus, the economic recovery may stall. As such, investors offered dollars on Wednesday, and during Thursday's Asian session.
And yet that wasn't the only reason for the decline in USD/CAD. The uptick in gold likely added to bearish pressures around the US dollar. The yellow metal rose above $1,935, extending Wednesday's bounce from $1,963 to $1,900.
In addition, the overnight rally in oil may have drawn bids for the Canadian dollar. WTI rose over 2% on Wednesday after the US government data showed a fall in inventories.