USD/CAD rebounds as US Dollar recovers, Oil support weakens for Canadian Dollar

The USD/CAD pair has rebounded towards 1.3700, marking a rise of approximately 0.20% on the day. This comes after trading near a five-month low around 1.3640 late last week. The modest recovery in demand for the US Dollar is primarily responsible for this movement, occurring amidst thin liquidity as we enter a holiday-shortened week. Typically, the US Dollar tends to see increased demand during this period, thus aiding the USD/CAD rise. Conversely, the Canadian Dollar faces headwinds due to weakening support from oil prices. In summary, the dynamics currently favour a recovery in the USD, while the Canadian Dollar appears to lack stability. In the short term, the pair may continue to hold around the 1.3700 level, but caution is advised due to the nature of the thin market.