- USD / CAD enters consolidation after jumping to multi-month highs.
- The US Dollar Index continues to rise, remains above 92.00.
- Crude oil remains calm after Monday’s sharp decline.
After Monday’s rally, the pair USD / CAD it retained its bullish momentum and reached its highest level since late January at 1.2805 on Tuesday. However, the pair struggled to extend its rally and erased most of its daily gains. At time of writing, the USD / CAD was up 0.05% on the day at 1.2754.
DXY updates multi-month highs above 93.00
The sharp drop in crude oil prices and the constant strength of the USD drove the USD / CAD higher at the beginning of the week. Pressured by worsening demand prospects and renewed production growth prospects, a barrel of West Texas Intermediate (WTI) lost nearly 7%. On Tuesday, WTI is trading unchanged around $ 66, helping the commodity-related CAD limit its losses.
On the other hand, the US Dollar Index is currently trading at its strongest level since early April at 93.08, rising 0.27% and allowing the USD / CAD to remain in positive territory.
Meanwhile, the major Wall Street indices are still on track to open higher on Tuesday, suggesting that the dollar could struggle to gain traction against its rivals in the second half of the day.
No data will be released on the Canadian economic docket and the perception of risk along with crude oil prices is likely to continue to affect USD / CAD movements.