USD/CAD drops below 1.3300 on USD selloff, oil upsurge
- USD/CAD is falling for second straight day on Tuesday.
- Greenback struggles to find demand amid risk-on flows.
- WTI builds on Monday's gains, climbs higher toward $43.
The USD/CAD pair closed the first day of the week with small losses as rising crude oil prices helped the commodity-sensitive loonie preserve its strength against the greenback. With the USD coming under renewed pressure and oil prices pushing higher, the pair extended its slide and touched a daily low of 1.3283. As of writing, the pair was down 0.5% on a daily basis at 1.3288.
Positive sentiment causes the DXY to turn south
The upbeat market mood, as reflected by impressive gains witnessed in major European equity indexes, is making it difficult for the safe-haven greenback to find demand. The US Dollar Index (DXY), which registered its highest daily close in more than 10 days at 93.61 on Monday, was last seen losing 0.3% at 93.32.
Meanwhile, boosted by risk-on flows, the barrel of West Texas Intermediate is up 1.75% on a daily basis at $42.70 ahead of the American Petroleum Institue's Weekly Crude Oil Stock data.
In the early Ameican session, the Producer Price Index (PPI) data will be featured in the US economic docket. July Housing Starts for Canada will be published as well. Nevertheless, these data are not expected to have a significant on the pair's movements. Investors will remain focused on Wall Street's performance. At the moment, the S&P 500 futures are up 0.6% on the day and a strong upsurge in the US stocks could cause the USD to continue to weaken against its major rivals.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
