- USD/CAD is fluctuating in a tight range above 1.2600.
- US Dollar Index remains on the back foot.
- WTI retreats below $60, limiting CAD’s gains for the time being.
The USD/CAD pair lost nearly 60 pips on Monday and extended its slide during the Asian session on Tuesday to a fresh multi-week low of 1.2608. However, with crude oil prices staging a correction, the pair recovered modestly and was last seen posting small daily losses at 1.2632.
WTI fails to hold above $60 after Monday’s rally
After rising nearly 5% last week, the barrel of West Texas Intermediate (WTI) rose above $60 at the start of the week for the first time in more than a year and provided a boost to the commodity-related loonie. Currently, the WTI is losing 0.62% on the day at $59.75.
On the other hand, the broad-based selling pressure surrounding the greenback doesn’t allow USD/CAD to gain traction.
Ahead of the Federal Reserve Bank of New York’s Empire State Manufacturing Index report, the US Dollar Index is down 0.36% on the day at 90.15.
At the moment, the S&P 500 Futures are up 0.43% at 3,947 and the USD is likely to remain on the back foot in the second half of the day if Wall Street’s main indexes manage to open decisively higher. Meanwhile, the only data featured in the Canadian economic docket will be Foreign Portfolio Investment in Canadian Securities, which is not expected to trigger a meaningful market reaction.
Technical levels to watch for
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