- Risk aversion continues to weigh on crude oil prices.
- US Dollar Index stays near multi-year highs above 102.50 mark.
- Coming up: January Wholesale Sales data from Canada.
After staging a corrective slide on Friday, the USD/CAD pair gained traction at the start of the week as the dismal market mood and falling crude oil prices made it difficult for the CAD to find demand. As of writing, the pair was trading at 1.4477, adding 0.8% on a daily basis.
Oil selloff hurts commodity-sensitive CAD
Fears over a long-lasting global recession and its impact on the energy demand and the ongoing price war in the market continue to weigh on crude oil prices. The barrel of West Texas Intermediate (WTI) lost nearly 30% last week and struggles to shake off the selling pressure. At the moment, the barrel of WTI is down 5.65% on the day at $22.10.
On the other hand, the greenback continues to dominate the foreign exchange market amid fears over USD shortage in funding markets and allows the bullish pressure to remain intact. The US Dollar Index, which tested the 103 handle for the first time since early February on Friday, was last up 0.8% on the day at 102.75.
The only data featured in the Canadian economic docket will be the Wholesale Sales figures for January. However, investors are likely to ignore that reading as it won’t be reflecting the effects of the coronavirus outbreak on the economy.
Technical levels to watch for