USD/CAD clings to modest recovery gains above 1.2800
- USD/CAD is staging a rebound following last week's slump.
- Crude oil prices are edging lower on Monday.
- USD stays relatively resilient against its rivals at the start of the week.
The USD/CAD pair fell by more than 100 pips last week and registered its lowest weekly close since April 2018 at 1.2780. With the greenback finding some demand and crude oil prices losing traction, the pair is staging a rebound on Monday and was last seen gaining 0.23% on the day at 1.2811.
WTI retreats below $46 following last week's rally
Last week, the barrel of West Texas Intermediate (WTI) touched its highest level in nearly nine months at $46.65 as OPEC and non-OPEC producers finally reached an agreement on the 2021 output strategy. However, the cautious market mood is making it difficult for the risk-sensitive WTI to extend its rally. At the moment, the WTI is down 0.8% on the day at $45.72 and hurting the commodity-related loonie.
Moreover, the positive impact of the upbeat Canadian jobs report, which showed that the Unemployment Rate in November declined to 8.5% from 8.9%, on the CAD seems to have faded.
On the other hand, the US Dollar Index (DXY) is rising modestly after dropping more than 1% last week and helping USD/CAD stay in the positive territory. Supported by safe-haven flows, the DXY is up 0.35% on the day at 91.02.
Later in the day, the Ivery Purchasing Managers Index report from Canada will be watched closely by the market participants. The only data featured in the US economic docket will be October Consumer Credit Change.
Technical levels to watch for