Discouraging data for investors are perceived to propel the US dollar to close this week’s exchanges in gains over its Canadian counterpart. The Loonie dollar has been on six consecutive weeks of appreciation prior to this week. However, diminishing hopes of Fed stimulus are seen to direct traders to the safety of the Greenback today.

USD/CAD trades reached a 0.9945 high on Wednesday; a 0.9946 high yesterday; and also reached 0.9945 earlier today. It seems that the bulls are being more aggressive, and the likelihood that the resistance would be eventually broken draws nearer. This persistence points to a considerable buy bias for today.

Looking at the movements in the financial markets from earlier today, investors scaled back their expectations of strong stimulus from the Federal Reserve and fretted about economic growth after manufacturing surveys from the Euro Zone and China depicted a bleak outlook. A substantial and sustainable improvement in the economy is required by the Fed in order to put off policy easing in the world’s largest economy.

On Thursday, Federal Reserve Bank of St. Louis President James Bullard, a non-voting member of the Fed , said that US data has been somewhat better since early this month and the minutes from Fed's latest policy meeting were "a bit stale", referring to discussions that indicated a third round of quantitative easing was in the cards. Michael Hewson, a Senior Market Analyst at CMC Markets interprets this as such that "Fed QE is a bit of an each way bet at the moment... But you've got to bear in mind that the rally that we've seen is on expectations of further QE, so I think it's already priced in."

Meanwhile, oil prices fell for a second day amid concern that European leaders are not making progress on resolving the region’s debt crisis, as well as on reports of a weakening economy in the world’s biggest crude user. Futures slid as much as 0.7 percent and headed for the first weekly decline in a month. This adds to bearish bets on the Canadian Loonie today.

In line with prospects of risk aversion in the markets today, the Greenback is likely to benefit. A long position is recommended for the USD/CAD, though be cautious of likely price corrections.

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