USD/CAD drops below 1.3550 on broad USD weakness
- USD/CAD edged lower in the early American session.
- Wall Street's upbeat performance weighs on greenback on Monday.
- WTI recovers above $40, trades in positive territory.
The USD/CAD pair closed the previous week with small gains but struggled to gather bullish momentum on Monday. After moving sideways below 1.3600 for the majority of the day, the pair lost its traction in the early American session dropped to 1.3535 before recovering a small portion of its losses. As of writing, the pair was down 0.32% on the day at 1.3547.
DXY drops below 96.50
The selling pressure surrounding the greenback caused the pair to turn south in the last hour. Despite the surging number of confirmed coronavirus infections in the US, Wall Street's main indexes opened the day sharply higher on vaccine hopes.
With the S&P 500 Index (SPX) climbing to its highest level in more than a month above 3,200 and gaining nearly 1%, the US Dollar Index (DXY) started to push lower and was last seen losing 0.35% on the day at 96.32.
On the other hand, falling crude oil prices weighed on the commodity-sensitive loonie and helped USD/CAD limit its losses on Monday. However, the barrel of West Texas Intermediate, which slumped to a daily low of $39.65 during the European session, took advantage of the upbeat market mood and staged a rebound. At the moment, the WTI is posting small daily gains at $40.60, allowing the loonie to preserve its strength against its rivals.
There won't be any macroeconomic data releases in the remainder of the day. On Wednesday, the Bank of Canada (BoC) will release its Monetary Policy Report for July.
Technical levels to watch for