USD/CAD drops to fresh multi-week lows below 1.3430 as DXY approaches 95.00
- USD/CAD pair is down more than 100 pips on Tuesday.
- US Dollar Index is at its lowest level in more than four months.
- WTI trades near $42, rises more than 3% ahead of API data.
The bearish momentum surrounding the USD/CAD pair gathered strength during the early trading hours of the American session and dragged it to its lowest level since the first week of June. As of writing, USD/CAD was down 0.8% on the day at 1.3428.
DXY extends slide on Tuesday
The sharp upsurge witnessed in the EUR/USD pair after EU leaders reached an agreement on the recovery fund caused the USD to lose interest on Tuesday. Furthermore, the upbeat market mood, as reflected by rising global equity indexes, put additional weight on the greenback's shoulders.
At the moment, the US Dollar Index (DXY), which tracks the buck's performance against a basket of six major currencies, is down 0.8% at 95.05, the worst level in more than four months. Meanwhile, the S&P 500 Index is up 0.67% at 3,273.
In addition to the broad-based USD weakness, strong gains witnessed in crude oil prices helped the commodity-sensitive CAD find demand and caused USD/CAD to stretch lower. Ahead of the American Petroleum Institue's (API) Weekly Crude Oil Stock data, the barrel of West Texas Intermediate (WTI) is up 3.55% on the day at $42.14.
Earlier in the day, Statistics Canada reported that Retail Sales in May increased by 18.7% on a monthly basis in May. On Wednesday, the Consumer Price Index (CPI) data from Canada will be looked upon for fresh impetus.
Technical levels to watch for