USD/CAD trades at fresh two-week lows near 1.3260 amid surging oil prices

• USD/CAD dropped to its lowest level since September 21st on Monday.
• Ricing crude oil prices help commodity-related CAD gather strength.
• Risk flows make it difficult for USD to find demand.

After closing the previous week in the negative territory, the USD/CAD pair extended its slide on Monday and touched its lowest level in two weeks at 1.3255. As of writing, the pair was down 0.35% on a daily basis at 1.3264.

Surging crude oil prices support CAD

Strong gains witnessed in crude oil prices at the start of the week help the commodity-related CAD outperform the greenback. Reports revealing that six Norwegian offshore oil and gas fields were shut due to a strike over pay provided a boost to crude oil on Monday. According to Reuters, Norway’s total output capacity is expected to decline around 330,000 barrels of oil equivalent per day.

The barrel of West Texas Intermediate (WTI), which lost 7.7% last week, is currently up 6.3% at $39.35.

On the other hand, the upbeat market mood is making it difficult for the greenback to find demand as a safe-haven. At the moment, the S&P 500 Index is up 1.33% on the day and the US Dollar Index is losing 0.4% at 93.43.

Earlier today, the data from the US revealed that the economic activity in the service sector continued to expand at a robust pace in September and helped market sentiment improve. Moreover, reports suggesting that US President Donald Trump could be discharged from the hospital as early as Monday is allowing risk flows to continue to dominate the markets. 

On Tuesday, International Merchandise Trade data for August will be featured in the Canadian economic docket.

Technical levels to watch for