The Canadian dollar is trading strong against the US dollar after strengthening to the highest level in 9 days during the previous session, supported by stronger crude oil prices. At the time of writing, USD/CAD is trading at around 1.325.

Although coronavirus fears continue to dominate the market sentiment and reduce the demand for oil in global markets, there are rising expectations of OPEC stepping in with deeper supply cuts. Crude oil prices have been weakening, losing over 20% since their highest levels of 2020 over worries that China will reduce its demand for crude oil as a result of of the extended lockdown in its factories and workplaces as well as travel restrictions as it tries to contain the spread of the virus.

This, in turn, has resulted in driving considerable weakness in the Canadian Dollar as crude oil is one of Canada’s leading exports. The CAD has also been bearish on account of a more dovish tone from the Bank of Canada lately.

In case the OPEC+ steps in with more production cuts in crude oil, it could help support prices and balance the supply of oil against the weakness in demand. This sentiment has helped support the Canadian Dollar in making gains once again.