- USD/CAD erased majority of last week’s gains on Monday.
- Rising crude oil prices help commodity-related loonie gather strength.
- USD faces heavy selling pressure amid risk rally.
The USD/CAD pair fell sharply on Monday and erased all the gains it registered last week. As of writing, the pair was losing 1.1% on the day at 1.3956.
WTI advances to two-month highs on demand optimism
Surging crude oil prices allowed the CAD to outperform its rivals at the start of the week. Reports suggesting that China’s oil consumption has almost recovered all the way to pre-crisis levels helped the West Texas Intermediate (WTI) push higher for the fifth straight day. At the moment, the WTI is trading at its highest level since mid-March at $31.90, up 7.05% on a daily basis.
On the other hand, the greenback is suffering heavy losses against its major rivals as the upbeat market mood dampens the demand for safe-haven currencies.
Heightened hopes about Moderna successfully developing a coronavirus vaccine after positive phase-one trial results triggered a risk-rally on Monday. Mirroring the upbeat market mood, Wall Street’s main indexes are gaining between 2.1% and 3.9%. Meanwhile, the US Dollar Index is losing 0.7% on the day at 99.65, keeping the bearish pressure on the pair intact.
On Tuesday, the New Housing Price Index will be the only data featured in the Canadian economic docket. More importantly, FOMC Chairman Jerome Powell’s testimony before the US Senate Banking Committee at 1400 GMT will be watched closely by the market participants.
Technical levels to watch for
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