USD/CAD drops to fresh multi-year lows below 1.2650
|- USD/CAD is falling for the second straight day on Wednesday.
- WTI trades in the positive territory above $50.
- USD selloff remains intact ahead of US data, FOMC Minutes.
The USD/CAD pair closed in the positive territory on Tuesday as surging crude oil prices helped the CAD outperform its rivals. With the oil rally remaining intact and the greenback struggling to find demand, the pair extended its slide and touched its lowest level since April 2018 at 1.2638. As of writing, the pair was down 0.2% on the day at 1.2644.
Focus shifts to US data, FOMC Minutes
Following the two-day OPEC+ meeting, Saudi Arabia announced on Tuesday that they will be voluntarily cutting their output in February and March, which will amount to 1 million barrels per day. The barrel of West Texas Intermediate (WTI) gained more than 5% and preserved its bullish momentum on Wednesday. At the moment, the WTI is trading at its highest level in more than 10 months, rising 1.44% on the day at $50.52.
On the other hand, the risk-on market environment makes it difficult for the greenback to find demand. In the meantime, the 10-year US Treasury bond yield is up more than 7% on Wednesday as investors price in a Democratic majority in the Senate. If the US T-bond yields continue to push higher, the USD could find some demand. Nevertheless, the US Dollar Index is currently losing 0.2% on the day at 89.26.
Later in the day, the ADP Employment Change, Factory Orders and Markit Services PMI data will be featured in the US economic docket. More importantly, the FOMC will release the December Minutes at 1900 GMT.
Technical levels to watch for
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