USD/CAD climbs higher toward 1.35 as oil selloff weighs on loonie
- The U.S. Energy Department says the oil market is well-supplied.
- Barrel of West Texas Intermediate drops below $61 handle.
- US Dollar Index steadies around last week's closing level near 97.30.
The USD/CAD pair rose to a fresh daily high of 1.3481 in the NA session as the commodity-sensitive loonie continued to weaken against its major rivals amid the intensifying crude oil selloff. As of writing, the pair was up 0.38% on the day at 1.3467.
Although reports of two Saudi oil tankers getting attacked off the United Arab Emirates coast on Sunday caused crude oil prices to jump in the early trade on Monday, the escalating trade tension following China's announcement of retaliatory measures to U.S. tariff hikes weighed on risk-sensitive commodities. In an official statement, China's finance ministry said that they were planning to introduce tariffs ranging 5%-25% on $60 billion worth of U.S. imports.
Additionally, the U.S. Energy Department's press secretary, Shaylyn Hynes, downplayed the potential impact of the conflict in the Middle East on the oil market. "The Department is monitoring the oil markets, and is confident they remain well-supplied," Hynes noted. The barrel of West Texas Intermediate, which rose to a 10-day high of $63.30 earlier in the day, was last seen trading a little below $61, losing 1.1% on a daily basis.
On the other hand, following a sharp drop to the 97 handle with the knee-jerk reaction to China's announcement, the US Dollar Index staged a rebound and turned flat on the day near 97.30, making it difficult for the pair to pull away from its highs.
Technical levels to watch for