- The USD / CAD is struggling to get rid of the downward pressure on Tuesday.
- The risk environment in the market continues to weigh on the greenback.
- Rising crude oil prices are stimulating demand for loonies sensitive to raw materials.
After testing 1.3500 during the early hours of the European session, the USD / CAD rebounded and recovered to 1.3550 before experiencing further downward pressure in the past hour. At the time of writing, the pair was trading at its lowest level since March 9 at 1.3495, losing 0.55% on a daily basis.
Tuesday’s strong risk appetite continues to weigh on the greenback. The US dollar index, which tracks the performance of the US dollar against a basket of six major currencies, fell to its lowest level after US stocks gained ground after a quiet start to the day. For the moment, the index is down 0.28% on the day around 97.50.
Meanwhile, the only data from the United States has shown that the ISM-NY economic conditions index improved to 19.5 in May from 4.3 in April and helped market sentiment to stay optimistic.
Focus on the BoC
OPEC + ‘s hopes of expanding and / or deepening reductions in oil production, on the other hand, are supporting crude oil prices on Tuesday. With a barrel of West Texas Intermediate trading above $ 36 with a daily gain of about 1.5%, the loonie maintains its strength against its rivals.
On Wednesday, the Bank of Canada will announce its decision on interest rates and issue the policy statement. By predicting this event, “current optimistic economic prospects could stimulate the loonie, while pessimism would lower it,” said Yohay Elam, analyst at FXStreet.