The USD/CAD pair maintained its bid tone through the early European session, albeit has retreated few pips from daily tops and was last seen trading around the 1.2570-65 region. The pair managed to regain some positive traction on Thursday and recovered a part of the previous day's heavy losses, though lacked any strong follow-through buying. A further recovery in the global risk sentiment continued acting as a headwind for the safe-haven US dollar and capped the upside for the USD/CAD pair.
Investors now seemed to have set aside worries about the potential economic fallout from the spread of the highly contagious Delta variant of the coronavirus. This was evident from a generally positive tone around the equity markets, which undermined demand for traditional safe-haven currencies, including the greenback. On the other hand, the overnight strong rally in crude oil prices continued lending some support to the commodity-linked loonie and collaborated to keep a lid on any meaningful gains for the USD/CAD pair. The black gold remained well supported by expectations that supplies will remain tight through the end of 2021.