- WTI erases portion of early gains, trades below $27.
- US Dollar Index drops below 100 handle in early American session.
- Coming up: IBD/TIPP Economic Optimism from US and Ivey PMI from Canada.
The USD/CAD pair fell to its lowest level in more than a week at 1.3991 on Tuesday before staging a modest recovery in the last hours. As of writing, the pair was down 0.66% on the day at 1.4015.
Crude oil recovery loses steam
Rising crude oil prices and the upbeat market mood helped the CAD preserve its strength against the greenback on Tuesday. The barrel of West Texas Intermediate (WTI) climbed above $27 on hopes of OPEC+ cutting the crude oil output to balance the market.
However, with some reports claiming that OPEC+ was discussing a reduction in production for only three months forced the WTI to erase a large portion of its daily gains. As of writing, the WTI was trading at $26.55, still adding around 1% on the day.
On the other hand, with risk-on flows dominating the markets for the second straight day, the greenback is struggling to find demand to allow the pair to remain near its lows. At the moment, the US Dollar Index, which tracks the USD’s performance against a basket of six major currencies, is down 0.9% on the day at 99.90.
Later in the day, the Ivey PMI data from Canada and the IBD/TIPP Economic Optimism from the US will be looked upon for fresh impetus. However, investors are likely to continue to react to changes in crude oil prices and the greenback’s market valuation.
Technical levels to watch for