USD/CAD pares early losses, approaches 1.3600 on oil selloff
- USD/CAD gained traction after dropping below 1.3550 on Monday.
- Falling crude oil prices hurt CAD in late American session.
- US Dollar Index recovers modestly, stays below 96.50.
The USD/CAD pair dropped below 1.3550 during the early trading hours of the American session as the USD came under strong selling pressure. However, slumping crude oil prices made it difficult for the loonie to find demand and caused the pair to erase its losses. As of writing, USD/CAD was unchanged on the day at 1.3592.
CAD loses momentum as WTI falls below $40
The upbeat market mood is weighing on the greenback on Monday. Wall Street's main indexes opened sharply higher and caused the US Dollar Index (DXY) to plummet to a daily low of 96.27. Although the DXY staged a rebound in the last hour, it's still down 0.18% on the day at 96.46.
A sharp retreat witnessed in the S&P 500 and the Nasdaq Composite in the late American session seems to be helping the USD gather strength against its peers.
On the other hand, the commodity-related CAD is weakening with the barrel of West Texas Intermediate (WTI) losing around 1.5% and trading below $40 and allowing the pair to push higher.
There won't be any significant macroeconomic data releases from Canada on Tuesday. The US economic docket will feature the inflation report. Markets expect the annual core Consumer Price Index (CPI) to rise from 0.1% in May to 0.6% in June.
Technical levels to watch for