USD/CAD pares early losses, posts modest gains around 1.2620
- USD/CAD fell to a fresh multi-year low on Monday.
- WTI edges higher toward $60 area after teo-day losing streak.
- US Dollar Index struggles to gain traction ahead of mid-tier data.
The USD/CAD pair slumped to its lowest level since April 2018 at 1.2579 but staged a rebound during the European trading hours. As of writing, the pair was up 0.12% on the day at 1.2625.
Rising crude oil prices helped the commodity-sensitive loonie gather strength at the start of the week. The barrel of West Texas Intermediate (WTI) closed in the negative territory on Thursday and Friday and lost more than 4% during that period.
Nevertheless, heightened optimism for a strong recovery in energy demand continues to provide a boost to crude oil prices and the WTI was last seen trading a little below $60, rising 1.5% and allowing the CAD to stay resilient against its rivals.
DXY remains on the back foot
On the other hand, the greenback is having a difficult time attracting investors despite the poor performance of US stock index futures. At the moment, the S&P 500 Futures are down 0.7% on the day and the US Dollar Index (DXY) is losing 0.15% at 90.23. A sharp decline in Wall Street's main indexes on Monday could support the USD in the second half of the day and lifts USD/CAD higher.
The Federal Reserve Bank of Chicago will release its National Activity Index for January later in the session. The Federal Reserve Bank of Dallas' Manufacturing Business Index will be featured in the US economic docket as well.,
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.
