USD/CAD rises to near 1.3500 due to lower crude Oil prices
- USD/CAD appreciates as commodity-linked CAD faces challenges due to lower Oil prices.
- WTI price falls as Eight OPEC+ members are set to raise production by 180,000 barrels per day in October.
- The US Dollar advanced following July's US Personal Consumption Expenditures Index data.
USD/CAD retraces its recent losses, trading around 1.3500 during the Asian session on Monday. This upside is attributed to the tepid commodity-linked Canadian Dollar (CAD) following the lower crude Oil prices. Given the fact that Canada is the largest Oil exporter to the United States (US).
West Texas Intermediate (WTI) Oil price falls for the second successive session, trading around $72.50 per barrel at the time of writing. This decline may be linked to the Organization of the Petroleum Exporting Countries and their allies (OPEC+) plans to increase production in the coming quarter.
Reuters reported, citing six sources, that OPEC+ is poised to move forward with a planned increase in Oil output starting in October. Eight OPEC+ members are set to raise production by 180,000 barrels per day (bpd) next month as part of a strategy to begin unwinding their most recent reduction of 2.2 million bpd, while maintaining other cuts until the end of 2025.
US Dollar (USD) received support as July's US Personal Consumption Expenditures (PCE) Index data led traders to scale back expectations of an aggressive Federal Reserve rate cut in September. According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Fed at its September meeting.
Traders are now likely to focus on the upcoming US employment figures, including the Nonfarm Payrolls (NFP) for August, to gain further insights into the potential size and pace of Fed rate cuts. On the Loonie front, S&P Global Manufacturing PMI will be eyed on Tuesday.
