USD/CAD softens below 1.3850 as traders brace for US election results

USD/CAD edges lower to around 1.3825 in Wednesday’s early Asian session. 

Election-related uncertainty weighs on the USD. 

Higher crude oil prices might support the Loonie for the time being. 

The USD/CAD pair weakens to near 1.3825 during the early Asian session on Wednesday. The US Dollar (USD) remains under some selling pressure amidst heightened expectations ahead of the result of the US presidential election and the US Federal Reserve (Fed) meeting.

Polls show a tight race between Republican presidential candidate Donald Trump and Democratic candidate Kamala Harris. Election polls showed that Donald Trump has a lead over his opponent. Kalshi shows an overwhelming 57% to 43% Trump's advantage over Harris, while Polymarket puts the figures at 60.7% and 39.5%, respectively.

“Watching the dollar is going to be critical tonight. That will be the most liquid and the most transparent messaging to what we are getting markets to do because that’s where people can put money to work fast,” noted David Zervos, Jefferies chief market strategist. 

Elsewhere, data released on Tuesday showed that the US ISM Services Purchasing Managers Index (PMI) rose to 56.0 in October from 54.9 in September, beating the estimation of 53.8. Meanwhile, S&P Global Services PMI came in at 55.0 in October, down from the previous reading and the consensus of 55.3.