The USD/CAD is trading slightly weaker this morning compared with the last session, despite climbing oil prices and the weakening US dollar. A softer US dollar helped boost oil prices in this morning’s trading session. Dollar-denominated commodities like oil tend to have a direct relationship with the Loonie.
Crude was also backed by a decline in the number of rigs drilling for oil in the U.S last week. Late on Friday, Baker Hughes reported that the rig count fell by four, to 873, which is a sign of slowing production. Oil market participants continue to debate whether a decision to cut output by the Opec and its partner producers, led by Russia, will be enough to rein in a prospering supply glut and bolster prices.
The USD/CAD is having another quiet day; it opened at 1.3379 yesterday and it is trading at 1.3393 as of the time of this writing. Later today, the existing home sales number for November will be published; however, market participants are waiting for more clues from both the Fed decision in the US and the Canadian consumer price index on Wednesday. A higher increase in the Canadian CPI number compared with its principal counterparty, the US CPI, would influence a stronger Loonie and vice-versa.