USD/CAD: Risk reversal suggests CAD bulls stepping back, Canadian budget in focus

One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, recedes bearish bias to a neutral 0.00 level during the last week, after declining for two consecutive weeks before that, according to data source Reuters.

Given the reduction in the negative figures, suggesting the call option gains momentum versus the put option, USD/CAD buyers are likely returning.

This could be because of the cautious sentiment ahead of the key budget presentation by Finance Minister Chrystia Freeland, up for publishing at 20:00 GMT on Monday. Although the government is likely to inflate taxes, as widely expected, any disappointment may not be taken lightly as the US-neighbor is yet to overcome the pandemic like America and the UK.

At press time, USD/CAD takes offers around 1.2500, refreshing intraday low, following its initial positive performance in Asia.

Read: USD/CAD holds mild gains above 1.2500 ahead of Canadian budget