USD/CAD drops to fresh three-month lows near 1.3370
- USD/CAD fell below 1.3400 during the American trading hours.
- US Dollar Index is posting modest daily losses below 97.00.
- Crude oil selloff caps commodity-sensitive CAD's gains on Monday.
The USD/CAD pair spent the first half of the day moving sideways near 1.3400 but lost its traction during the American trading hours and fell to its lowest level since early March at 1.3371. As of writing, the pair was losing 0.3% on the day at 1.3385.
USD struggles to build on Friday's gains
The renewed selling pressure surrounding the greenback seems to have caused USD/CAD to start pushing lower. Last Friday, the upbeat jobs report from the US helped the US Dollar Index (DXY) snap an eight-day losing streak. The DXY, which stayed relatively quiet 97.00 for the majority of the day, is now posting daily losses near 96.80.
In the absence of significant macroeconomic data releases from the US, the risk perception is impacting the USD's performance. At the moment, the Dow Jones Industrial Average and the S&P 500 are gaining 1.05% and 0.55% on a daily basis, not allowing the safe-haven USD to find demand.
On the other hand, falling crude oil prices make it difficult for the commodity-sensitive loonie to continue to gather strength. After Saudi Arabia's energy minister said on Monday that they won't be extending the additional voluntary oil output reductions, the barrel of West Texas Intermediate (WTI) turned south from the multi-month highs its set above $40. As of writing, the WTI was down 2.05% on the day at $38.25.
Ahead of Wednesday's FOMC meeting, USD/CAD is likely to continue to trade in tight ranges. Tuesday's economic docket will feature the IBD/TIPP Economic Optimism Index and the NFIB Business Optimism Index from the US.
Technical levels to watch for