USD/CAD extends correction, trades around 1.2370
|- USD/CAD continues to push lower during the American session.
- US Dollar Index drops below 92.00 on Monday.
- Surging crude oil prices provide a boost to CAD.
Following last week's impressive upsurge, the USD/CAD pair started the new week on the back foot and staged a deep correction. As of writing, the pair was trading at 1.2370, losing 0.75% on a daily basis.
USD selloff picks up steam
The broad-based USD strength and rising crude oil prices weigh heavily on USD/CAD on Monday. After posting its largest weekly percentage gain on the back of the hawkish shift seen in the FOMC's policy outlook, the US Dollar Index (DXY) fell sharply on Monday. At the moment, the DXY is losing 0.45% on the day at 91.90.
Meanwhile, St. Louis Fed President James Bullard noted on Monday that the Fed will need to be ready to make adjustments to tapering. Moreover, Dallas Fed President Robert Kaplan reiterated that he is in favour of taking the foot off the accelerator with regards to monetary support sooner rather than later. Despite these comments, the greenback struggled to regather its strength.
On the other hand, renewed concerns over the US and Iran failing to reach a deal on nuclear talks triggered a sharp rally in crude oil prices on Monday. With the barrel of West Texas Intermediate (WTI) rising nearly 3% and reaching its highest level since October 2018 at $73.45, the commodity-related loonie continues to outperform its major rivals.
Technical levels to watch for
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