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USD/CAD Nears 1.3900 as Oil Prices Rise and US Election Looms

by Krystal

The USD/CAD pair is maintaining gains from the past two days, trading near 1.3900 during Monday’s Asian session. The Canadian Dollar (CAD), closely tied to commodity prices, is bolstered by rising oil prices. This increase is linked to OPEC+’s decision to delay a planned output increase, which includes the Organization of the Petroleum Exporting Countries and its allies like Russia.

West Texas Intermediate (WTI) oil prices rose about 2% on Monday, hovering around $70.50 per barrel. Over the weekend, OPEC+ decided to extend its production cut of 2.2 million barrels per day (bpd) until the end of December 2024, citing weak demand and increased supply from outside the coalition. Member countries also reaffirmed their commitment to meet production targets and to address any overproduction by September 2025.

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As the USD/CAD pair moves, traders are keeping a close eye on the US presidential election set for Tuesday. The latest New York Times/Siena College poll shows Vice President Kamala Harris slightly leading in Nevada, North Carolina, and Wisconsin, while former President Donald Trump holds a narrow advantage in Arizona. The race is tight in Michigan, Georgia, and Pennsylvania. Conducted from October 24 to November 2, the poll indicates that all matchups in these seven key states fall within a 3.5% margin of error.

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Additionally, traders are focused on the upcoming decision from the US Federal Reserve (Fed), with expectations for a modest 25 basis point rate cut this week. According to the CME FedWatch Tool, there is a 99.6% probability of this quarter-point reduction happening in November.

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