USD/CAD is making a solid intraday recovery as demand for the USD continues to grow strongly. Safe haven for recovering US bonds and rising risk-free momentum. Positive oil prices could support the Loonie and limit gains in large oil prices. At , , the USD/CAD pair rebounded sharply from the 1.3320 area, the lowest level since November 25 earlier this Friday, and rose early in the North American session. The momentum is pushing spot prices further above the 1.3 00 mark, supported by a good pick-up in US dollar demand. The USD , index, which measures the dollar’s performance against a basket of currencies, is recovering strongly from seven-month lows on the back of a number of factors. Concerns about a deepening global recession continue to limit market optimism. This is reflected in the new global risk aversion in business and benefits the safe position. In addition, the US dollar is supported by a daily rise in the yield of US government bonds. However, growing acceptance that the Federal Reserve is softening its hawkish stance could act as a headwind for US bond yields and the dollar. In fact, the market now estimates a lower interest rate of 25 basis points in February. Bets were boosted by Thursday’s US consumer inflation figures and comments from several Federal Reserve officials. This, in turn, could prevent USD bulls from making aggressive bets and keep a lid on a significant rally in the USD/CAD pair. Additionally, positive crude oil prices could support the commodity-related Loonie and help cap the USD/CAD pair. Therefore, it makes sense to wait for a strong follow-on buy before confirming that current prices have formed a short-term bottom and are positioned for further gains. Traders are now expecting a further increase in US Michigan consumer sentiment. This, combined with oil price dynamics, can allow traders to take advantage of short-term opportunities.