USD/CAD reaches seven-month highs above 1.4100 amid lower crude Oil prices

• USD/CAD marked a seven-month high of 1.4119 on Wednesday.
• The Canadian Dollar weakened as declining oil prices, driven by a sharp rise in US inventories, heightened oversupply concerns.
• The US Dollar could face challenges amid the ongoing US government shutdown.

USD/CAD continues its winning streak for the fifth consecutive day, trading around 1.4110 during the Asian hours on Wednesday. The pair gains ground as the commodity-linked Canadian Dollar (CAD) faces challenges amid weakening Oil prices. It is important to note that Canada is the largest crude exporter to the United States (US).

West Texas Intermediate (WTI) Oil price extends its losses for the third successive session, trading around $60.00 per barrel at the time of writing. Crude Oil prices fall as a sharp rise in inventories intensifies concerns about oversupply. The API Weekly Crude Oil Stock jumped by 6.5 million barrels last week, far surpassing expectations for a 2.4-million-barrel draw and recording the largest weekly increase since early July.

The upside of the USD/CAD pair could be limited as the US Dollar (USD) struggles due to the ongoing US government shutdown. The deadlock has now entered its sixth week and is poised to become the longest federal funding lapse in US history after the Senate once again failed to pass a short-term funding bill. The most recent attempt to resolve the standoff, Republican-backed temporary legislation, was rejected by the Senate for the 14th time on Tuesday.

However, the Greenback received support from the cautious sentiment surrounding the US Federal Reserve (Fed) policy stance for December. Fed Chair Jerome Powell stated during last week's post-meeting press conference that another rate cut in December remains uncertain. Powell also cautioned that policymakers might need to adopt a wait-and-see stance until the release of new official data resumes.