Canadian Dollar Extends Gains Against US Dollar Boosted by Oil Prices

The Canadian dollar rallied against its Southern neighbor driven by the recovery in global crude oil prices, which had trended lower earlier. The USD/CAD currency pair fell to new lows as the greenback fell along with declining US Treasury yields as riskier currencies and assets rallied higher.
The USD/CAD currency pair rallied to a high of 1.2765 in the early North American session before switching gears and falling to a low of 1.2703 at the time of writing.
The currency pair initially rallied higher as crude oil prices fell, as tracked by the West Texas Intermediate, which hit a low of 57.26 earlier today, taking down the commodity-linked loonie. News of the discovery of a third strain of the coronavirus known as the P.I variant, which appears to be infecting even people who previously had the coronavirus, also weighed on the loonie. Investors were also worried about Canada’s strict lockdown measures that made Air Canada fire 1,500 employees today as flights to Mexico, and the Caribbean remain suspended. The lack of news releases from the Canadian docket left the loonie at the mercy of investor sentiment and crude oil prices.
The release of the US NFIB business optimism index for January had a muted impact on the pair. The upbeat US JOLTS job openings report by the Bureau of Labor Statistics had minimal impact on the pair.
The currency pair’s future performance is likely to be affected by crude oil prices and US dollar dynamics.
The USD/CAD currency pair was trading at 1.2711 as at 18:45 GMT having fallen from a high of 1.2765. The CAD/JPY currency pair was trading at 82.30 after rising from a low of 81.96.
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Original from: www.earnforex.com