USD/CAD climbs to fresh daily highs above 1.3430 on oil weakness, USD recovery
|- USD/CAD is trading above 1.3400 on Monday after last week's choppy action.
- US Dollar Index rising for the second straight day.
- WTI drops below $40 to weigh on commodity-sensitive CAD.
The USD/CAD pair closed the previous week little changed above 1.3400 as the commodity-sensitive CAD failed to take advantage of broad-based weakness amid falling crude oil prices. With the greenback gathering strength and crude oil staying under selling pressure, USD/CAD stretched higher on Monday and touched a daily top of 1.3441. As of writing, the pair was up 0.16% on a daily basis at 1.3435.
WTI trades below $40 on Monday
Resurfacing worries over a dismal global energy demand outlook due to a second wave of coronavirus and the reduction in OPEC+ output cuts by 2 million barrels per day from August to December continue to weigh on crude oil prices. At the moment, the barrel of West Texas Intermediate was losing more than 1% on the day at $39.90.
On the other hand, the US Dollar Index (DXY), which staged a decisive rebound on Friday, started the new week on a strong footing. Ahead of the IHS Markit's and the ISM's Manufacturing PMI data for July, the DXY is up 0.32% at 93.75. There won't be any macroeconomic data releases featured in the Canadian economic docket.
A rebound witnessed in the US Treasury bond yields seems to be helping the USD preserve its strength against its major rivals. The 10-year US T-bond yield was last up 2.4% at 0.547%.
Technical levels to watch for
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