Canadian Dollar rises as Greenback withers on Wednesday

• The Canadian Dollar climbed over 0.5% on Wednesday as markets hammer the US Dollar.
• Investors are growing apprehensive of the Greenback as Treasury yields climb.
• Federal budget deficit concerns and a stubbornly immovable Fed are crimping investor confidence.

The Canadian Dollar (CAD) caught a firm bid on Wednesday, climbing one-half of one percent during the midweek market session. It's a data-light session during the American market window, and markets are roiling as federal debt headlines and rising Treasury yields spike market confidence into the floor.

Canadian New Housing Prices surprisingly contracted in April. The data is strictly low-tier, but the potential return of housing affordability in one of the most expensive developed countries in housing terms is providing some support for the Loonie. Impactful Canadian economic data will remain limited through the remainder of May, with the Bank of Canada's (BoC) next rate call slated for June 4.

Daily digest market movers: Canadian Dollar catches a bid as markets fret over debt and yields

• The Canadian Dollar is on the rise in the near-term, but still has plenty of work remaining to pair May's early losses.
• US Treasury bonds saw both rising yields and declining demand on Wednesday as US government debt concerns reignite.
• A recent rise in Crude Oil prices is helping to provide some support for the Loonie. Barrel bids have made a halting recovery from recent lows.
• The US government is on pace to pass President Donald Trump's "big beautiful tax bill" that will add $4T to the US deficit over the next ten years.
• The spending-heavy, revenue-light budget comes hot on the heels of the US losing it's triple-A sovereign debt rating from the Moody's ratings agency for the first time in over a century.

Canadian Dollar price forecast

The Canadian Dollar has gained ground against the Greenback for three straight trading sessions, pushing USD/CAD back into defensive positioning and sending bids back down to the 1.33850 region. As the Loonie pares away near-term losses against the US Dollar, USD/CAD is caught in a downside pivot below the 200-day Exponential Moving Average (EMA) near 1.4025. Technical oscillators are still caught in a downside pivot, but still have plenty of room to run before hitting oversold territory, implying USD/CAD could have some room to move further lower.

USD/CAD daily chart