USD/CAD pares early losses on oil drop, trades around 1.2060
|- USD/CAD is edging higher during the American session.
- WTI turned south after testing $67, loses nearly 1% below $66.
- US Dollar Index stays in the negative territory below 90.00.
After dropping to its lowest level in six years at 1.2011 earlier in the day, the USD/CAD pair managed to stage a recovery and was last seen trading flat on the day at 1.2062.
WTI drops below $66 following earlier rally
Crude oil prices built on Monday's gains and the barrel of West Texas Intermediate (WTI) reached its strongest level since early March at $67.00 on Tuesday, helping the commodity-sensitive CAD outperform its rivals. With WTI reversing its direction and losing nearly 1% below $66, the loonie lost interest and allowed USD/CAD to erase its losses.
On the other hand, the greenback remains on the back foot with the US Dollar Index losing 0.4% at 89.83 at the time of press. Nevertheless, the modest rebound witnessed in the benchmark 10-year US Treasury bond yield seems to be helping the USD limit its losses. Additionally, Wall Street's main indexes trade mixed after the opening bell, making it difficult for risk flows to continue to dominate the financial markets.
The only data from the US revealed on Tuesday that Housing Starts declined by 9.5% in April and Building Permits rose by 0.3%. These figures failed to trigger a meaningful market reaction. There won't be any other data releases in the remainder of the day and the pair is likely to continue to react to changes in crude oil prices.
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.