USD/CAD advances toward 1.3700 as oil prices struggle to rebound

• USD/CAD trades modestly higher on the day above 1.3670.
• Crude oil prices trade little changed on the day following last week’s decline.
• Bank of Canada Governor Macklem is scheduled to speak later in the day.

USD/CAD started to edge higher toward 1.3700 in the second half of the day on Monday as the commodity-sensitive Canadian Dollar is having a difficult time attracting investors amid crude oil’s dismal performance. The pair was last seen rising 0.18% on a daily basis at 1.3675

The barrel of West Texas Intermediate (WTI) lost more than 10% last week and touched a fresh 2022-low near $70. Although China announced additional measures toward re-opening earlier in the day, investors don’t seem to be convinced about oil demand improving in the near term. As of writing, the WTI was trading flat on the day at $71.40.

Meanwhile, Wall Street’s main indexes remain on track to open modestly higher with US stock index futures rising around 0.3% ahead of the opening bell.

In case the market mood continues to improve later in the session, the US Dollar could weaken against its rivals and limit USD/CAD’s upside. Later in the session, Bank of Canada (BOC) Governor Tiff Macklem will be delivering a speech. On December 7, the BOC hiked its policy rate by 50 basis points to 4.25% as expected and the policy statement revealed that policymakers were yet to decide whether the rate needs to rise further.

On Tuesday, the Consumer Price Index (CPI) data will be featured in the US economic docket ahead of the Federal Reserve’s all-important policy announcements on Wednesday.

Technical levels to watch for