USD/CAD retreats to 1.2800 area amid surging crude oil prices
- USD/CAD is pushing lower after closing higher on Monday.
- US Dollar Index rose to its highest level since early December.
- WTI broke above $54 for the first time in nearly a year.
The USD/CAD pair came under renewed bearish pressure during the European trading hours and dropped to a fresh daily low of 1.2780 as surging crude oil prices provided a boost to the commodity-related loonie. However, the broad-based USD strength allowed the pair to stage a rebound. As of writing, USD/CAD was down 0.35% on a daily basis at 1.2805.
WTI advances beyond $54
Supported by renewed optimism that the vaccine rollout will pave the way for a steady recovery in global energy demand and reports showing that producers are sticking to their output cut commitments, crude oil gained traction on Tuesday. As of writing, the barrel of West Texas Intermediate (WTI) was trading at its highest level in nearly a year at $54.75, gaining 2.35% on the day.
On the other hand, the sharp decline witnessed in the EUR/USD pair seems to be helping the greenback find demand and stay resilient against its rivals. The US Dollar Index is currently at its strongest level since early December at 91.10, gaining 0.13%.
Later in the session, the ISM-NY Business Conditions Index and the IBD/TIPP Economic Optimism Index will be featured in the US economic docket. Additionally, New York Federal Reserve President John Williams is scheduled to deliver a speech at 1800 GMT.
Technical levels to watch for