- US Dollar Index struggles to find direction on Monday.
- WTI remains on track to post heavy losses.
- BoC says business confidence deteriorates in first quarter.
Despite the poor performance of crude oil prices on Monday, the CAD gathered strength against the USD and dropped to a daily low of 1.4085. As of writing, the pair was trading at 1.4112, down 0.63%, or 90 pips, on the day.
CAD ignores WTI selloff
The upbeat market mood seems to be helping the loonie disregard the sharp drop in crude oil prices and find demand. After the OPEC+ emergency meeting got postponed to Thursday over the weekend, the barrel of West Texas Intermediate (WTI) started to erase last week’s recovery gains.
The uncertainty regarding a new OPEC+ output cut deal continues to weigh on WTI, which was last seen erasing 9.5% on the day at $26.05.
Meanwhile, global equity indexes’ decisive rebound on signs of a slowdown in the rate of new coronavirus fatalities and infections in most affected regions seem to be helping risk-sensitive currencies outperform the greenback. After adding more than 2% last week, the US Dollar Index is staying relatively quiet near the 100.60 handle on Monday.
Earlier in the day, the Bank of Canada in its quarterly Business Outlook Survey noted that the business confidence was already deteriorating in the first quarter even before concerns over the coronavirus outbreak intensified.
“Firms are taking a wait-and-see approach on capital expenditures; almost all firms in tourism and food-service cutting back on renovations and purchases of machinery and equipment etc. to preserve cash,” the BoC added. However, the CAD didn’t have a difficult time preserving its strength despite these remarks.
On Tuesday, the IBD/TIPP Economic Optimism data from the US and Ivery Purchasing PMI data from Canada will be featured in the economic docket.
Technical levels to watch for