USD/CAD inter-market: Loonie affected by lower crude oil prices

USD/CAD rose above 1.3100 and reached the highest level in a month. The pair was affected by the decline in crude oil prices that offset the improvement in risk appetite.

The WTI barrel moved to the downsides during the American session after a short-lived recovery with the price back to daily lows. Oil futures trade at $44.50, far from the highs that hit above $45.50 and continues to consolidate at 2-month lows, down 1.50% for the day.

In Wall Street, the Dow Jones is up 0.60% or 110 points at 18,257 flirting with a record close; the Nasdaq gains 0.80%. Main European stock indexes finished with gains of around 1.50%. Despite the improvement in equities, the US dollar rose against commodity currencies supported by an increase in Fed rate hike expectations. According to the CME Group FedWatch tool the odds for a July rate hike dropped to 0% but for a September hike, odds rose from 5.9% to 12.0%.

USD/CAD currently trades at 1.3125/30, after hitting a daily high at 1.3139 and is headed toward the highest daily close since May 23. From the levels it had a week ago, the pair is up almost 300 pips, at the same time crude oil prices lost 9%, falling from $49.10 to $44.40.