USD/CAD climbs to daily highs above 1.2550 amid plunging crude oil prices

• USD/CAD rose sharply during the American trading hours. 
• WTI is down more than 2%, trades below $62.
• US Dollar Index continues to fluctuate above 91.00.

The USD/CAD pair gained traction in the early trading hours of the American session and rose to a daily high of 1.2557. As of writing, the pair was up 0.15% on a daily basis at 1.2552.

WTI plummets below $62

In the absence of significant macroeconomic data releases, the sharp decline witnessed in crude oil prices caused the commodity-sensitive loonie to face heavy selling pressure. The barrel of West Texas Intermediate (WTI), which reached a monthly high of $64.35 earlier in the day, is currently trading at $61.70, losing 2.65%.

According to Reuters, the US House Judiciary Committee has passed a bill that would open OPEC to antitrust lawsuits over production cuts and this development seems to have triggered an oil selloff.

On the other hand, the risk-averse market environment is providing a boost to the greenback and the US Dollar Index stays above 91.00 despite falling Treasury bond yields, allowing USD/CAD to preserve its bullish momentum.

On Wednesday, the Bank of Canada (BoC) will announce its Interest Rate Decision and release the Monetary Policy Report. The BoC is widely expected to keep its policy rate unchanged at 0.25% but it could announce an adjustment to asset purchases and trigger a reaction in USD/CAD.

Technical levels to watch for