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  • USD/CAD continues to push higher on slumping crude oil prices.
  • US Dollar Index posts modest daily gains above 97.00.
  • Manufacturing Sales in Canada 

The USD/CAD pair snapped a three-week losing streak last week as slumping crude oil prices caused the commodity-sensitive loonie to weaken against its rivals. With the barrel of West Texas Intermediate (WTI) losing around 3% on Monday, the pair climbed to its highest level in two weeks at 1.3686 before going into a consolidation phase. As of writing, USD/CAD was up 0.4% on the day at 1.3638.

Heightened worries over a second coronavirus wave crippling the global economic recovery seem to be causing investors to start pricing a dismal energy demand outlook. The WTI, which lost 6.6% last week, is trading deep in the negative territory near $35.30 on Monday, making it difficult for the CAD to deepen its recovery.

The data published by Statistics Canada on Monday revealed that Manufacturing Sales in April declined by 28.5% and put additional weight on the loonie’s shoulders. 

USD clings to small gains ahead of Powell’s testimony

Meanwhile, the risk-off market environment is helping the greenback outperform its peers. The US Dollar Index is up 0.15% on the day. There won’t be any significant macroeconomic data releases in the remainder of the day and crude oil’s performance is likely to continue to impact USD/CAD’s movements.

On Tuesday, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, will be testifying before Congress and the US economic docket will feature Industrial Production and Retail Sales figures.

Technical levels to watch for

 

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