Crude oil weakness adds pressure to CAD as WTI drops below $78

WTI crude oil futures declined 2.1% to $77.80, weighing on the Canadian dollar as energy sector concerns mount. USD/CAD rose 0.3% to 1.3720 despite broad dollar weakness, highlighting the loonie's vulnerability to oil price movements. The crude selloff stems from rising US inventories and concerns about global demand amid slowing economic growth. Canada's heavy reliance on energy exports makes CAD particularly sensitive to oil price fluctuations, with the correlation strengthening during periods of volatility. Technical analysis shows USD/CAD approaching resistance at 1.3750, while support holds at 1.3680. The Bank of Canada's dovish tilt compared to other major central banks adds to CAD weakness. Traders should monitor weekly US oil inventory data and any developments in global energy markets, as sustained oil weakness could push USD/CAD toward the 1.3800 level despite dollar headwinds.