USD/CAD’s Losses Extend On Oil’s Bull Run
The Loonie has been rallying over the past few days as the crude oil prices reach their highest levels in more than six years.
Loonie Rallies On The Back Of An Oil Bull Run
The USD/CAD pair has been underperforming over the past few hours as the Loonie continues to perform well. The Loonie pair is responding to a multi-month high of WTI crude oil prices, with crude currently Canada’s major export material.
At the time of writing, the USD/CAD pair is trading at 1.2457 and is expected to decline further as the Canadian dollar maintains its bullish performance. WTI crude oil price rose to a high level not seen since 2014. The crude was trading at nearly $80, up by 1.60%.
The surge in the crude oil price comes as the financial markets fear more supply outages due to the Pamela storm now heading towards the Gulf of Mexico. If it hits this energy-rich region by next week, then the demand for crude from other parts of the world could increase, and the Loonie would rally higher.
Furthermore, crude oil prices could soar higher thanks to the positive headlines regarding the United States stimulus and hopes of economic recovery from the Covid pandemic. The USD/CAD pair could drop towards the 1.2400 level in the coming hours if the market condition persists.
Canada Outperforms The US in The Job Department
Another key reason why the Loonie is outperforming the greenback is because of the latest job data released from both countries. On Friday, Canada and the United States published their employment reports. However, the Canadian economy outperformed that of the US in this aspect.
The US NFP dropped to 194k compared to the 500k that was expected. Meanwhile, the Unemployment Rate dropped to 4.8% compared to the 5.1% analysts had predicted. In Canada, the Unemployment Rate of 69% is close to the 7.1% market analysts had predicted, while the employment rate of 65k was lower than the expected 157k.