USD/CAD drops to fresh weekly lows below 1.3900
|- USD/CAD lost its traction and fell sharply on Tuesday.
- Rising crude oil prices help the CAD gather strength against its rivals.
- US Dollar Index falls toward 99 ahead of mid-tier data releases.
The USD/CAD pair stayed quiet on Monday amid thin trading conditions and closed the day virtually unchanged a little below 1.4000. With the greenback staying under selling pressure and crude oil prices extending last week's rebound, the pair turned south on Tuesday. As of writing, USD/CAD was trading at its lowest level in a week at 1.3872, losing 0.8% on a daily basis.
Easing global energy demand worries continue to boost crude oil prices. After closing the previous week 12.7% higher, the barrel of West Texas Intermediate (WTI) posted modest gains on Monday before resuming its rally on Tuesday. As of writing, the WTI was up 1.05% on a daily basis at $34.05, helping the commodity-sensitive CAD outperform its rivals.
USD remains on back foot
On the other hand, the greenback is struggling to shake off the bearish pressure as the upbeat market mood dampens the demand for safe-haven currencies. At the moment, the S&P 500 futures are up nearly 2% on the day to suggest that Wall Street is likely to open decisively higher on Tuesday.
Ahead of New Home Sales, Chicago Fed National Activity Index, Dallas Fed Manufacturing Index and Conference Board Consumer Confidence Index data from the US, the US Dollar Index is down 0.6% on the day at 99.22.
Toward the end of the day at 2100 GMT, Bank of Canada Governor Stephen Poloz and Deputy Governor Carolyn Wilkins will be testifying before parliament.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.