USD/CAD marches towards 1.2500 on weak oil prices

• USD/CAD has delivered a bullish open-drive as oil prices nosedive more than 5%.
• Biden aims for a massive oil release to corner the soaring inflation.
• The DXY has observed a dead cat bounce on weak Asian cues.

Despite the fact that the USD/CAD pair fell below 1.2450 on Wednesday, there has been significant buying activity from market players in the pair. During the major's open-drive session on Thursday, the asset began moving in a bullish direction towards the north right from the start of the session.

The loonie bulls put on a bad performance on Thursday as oil prices plummeted like a house of cards, causing the currency to lose value. At the time of publication, the West Texas Intermediate (WTI) futures contract on the New York Mercantile Exchange (NYMEX) is auctioning for roughly $100.00. Prices of crude oil fell after US President Joe Biden indicated that his administration is contemplating a huge oil release to the tune of 180 million barrels to mitigate the effect of rising inflation, according to the news agency Reuters.

Crude oil bears were looking for a spark that would allow them to pump more oil into the global supply, and Vice President Biden's commitment to maintaining price stability in the oil market by boosting oil supply has had the desired impact.

Furthermore, as reported by Reuters, the International Energy Agency (IEA) nations will vote on a collective oil release on Friday, according to an announcement made by New Zealand's Energy Minister's office on Thursday. This has contributed to the recent decline in oil prices. Meanwhile, while I was writing this post, the WTI US crude oil price dropped 5.33 percent in the Asian session. It is worth remembering that Canada is the world's biggest exporter of oil to the United States, and a drop in oil prices has a negative impact on inflows into the country and, ultimately, on their budgetary objective.

On the dollar front, the US dollar index (DXY) has seen a dead cat bounce and has risen to levels around 98.00 as a result of dismal Asian stock market conditions.