- USD/CAD trades at 2 week low.
- Risk on trade weighs on the USD.
- WTI rallies for a fifth straight day on Tuesday.
USD/CAD sold off on Monday and extended its slide on Tuesday amid rising crude oil prices and USD weakness. The pair touched a 2 week nadir at 1.3010.
Oil rally continues on upbeat demand outlook
Recent vaccine developments have revived optimism for a steady recovery in global oil demand which continue to lift crude oil prices. West Texas Intermediate rose over 1% on Monday and today trades at a three month high of $43.52, up 1.6%.
The upbeat mood in the market has spilled into Tuesday with the major European stock indexes rising over 1%. The US S&P 500 Futures trade +0.8%, suggesting that risk flows are driving the financial markets.
As a result, the US Dollar is out of favour. Ahead of the Conference Board’s Consumer Confidence Index data, the US Dollar Index is trading0.3% lower on the day at 92.22.