USD/CAD drops toward 1.3500 on oil rally, USD weakness
- USD/CAD extends slide after losing more than 100 pips on Monday.
- Crude oil prices climb to multi-month highs on output cut hopes.
- US Dollar Index remains under pressure amid rallying global equity indexes.
The USD/CAD pair fell sharply and posted its lowest close since early March at 1.3573. The bearish pressure surrounding the pair remained intact on Tuesday amid rising crude oil prices and broad USD weakness. As of writing, USD/CAD was trading at its lowest level in 12 weeks at 1.3510, down 0.45% on the day.
WTI advances to highest level since early March
Crude oil prices closed the first day of the week with small gains and stretched higher on Tuesday. Boosted by heightened hopes of OPEC+ producers extending the oil output cuts to support prices, the barrel of West Texas Intermediate is trading at fresh multi-month highs at $36.40, gaining 2.4% on a daily basis.
Meanwhile, easing coronavirus-related restrictions in major economies and optimism surrounding a global economic recovery in the second half of the year allow risk-on flows to dominate the financial markets.
With major European equity indexes posting decisive gains on Tuesday, the greenback is struggling to find demand as a safe-haven. At the moment, the US Dollar Index is down 0.26% on a daily basis at 97.57.
In the second half of the day, the ISM-NY Business Conditions Index will be the only data featured in the US economic docket. Crude oil's performance and the USD's market valuation is likely to continue to impact USD/CAD's movements.
Technical levels to watch for