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  • WTI extends daily slide, trade below $21 ahead of API data.
  • US Dollar Index remains depressed around the 99 handle.
  • Coming up on Wednesday: BoC’s monetary policy meeting. 

Despite the selling pressure surrounding the greenback in the second half of the day, the USD/CAD pair continues to trade above the 1.3900 handle as slumping crude oil prices make it difficult for the CAD to find demand. As of writing, the pair was up 0.05% on a daily basis at 1.3908.

Oil suffers heavy losses

Heightened concerns over weakening global energy demand amid coronavirus-related lockdowns continue to weigh on crude oil prices even after OPEC+ and other producers reached a deal to cut output by 9.7 million barrels per day. Ahead of the American Petroleum Institue’s (API) Weekly Crude Oil Stock data, the barrel of West Texas Intermediate is erasing nearly 7% on the day at $20.80.

On the other hand, the US Dollar Index (DXY) is falling for the fourth straight trading day on Tuesday to keep the pair’s upside capped. The upbeat market mood as reflected by surging equity indexes in the US weighs on the safe-haven USD and keeps the DXY deep in the negative territory near 99.

On Wednesday, the Bank of Canada will announce its interest rate decision and release the monetary policy statement.

BoC Preview: Four scenarios and USD/CAD implications – TDS.

Technical levels to watch for