• USD/CAD may rise as advancing Oil prices fuel concerns over potential supply disruptions.
• US–Venezuela tensions escalated after the US pursued another vessel near Venezuelan waters following tanker seizures.
• Fed’s Hammack said policy is well-positioned to pause and assess the impact of 75-basis-point rate cuts.

USD/CAD moves little after registering little gains in the previous session, trading around 1.3800 during the Asian hours on Monday. The pair may come under pressure as the commodity-linked Canadian Dollar (CAD) draws support from rising Oil prices, given Canada’s status as the largest Oil exporter to the United States (US).

West Texas Intermediate (WTI) Oil trades near $57.00 per barrel at the time of writing, with prices advancing amid concerns over potential supply disruptions. Tensions between the US and Venezuela have escalated after the US reportedly pursued another vessel near Venezuelan waters following the seizure of two Oil tankers this month.

Meanwhile, focus also remains on Eastern Europe, where Ukraine struck a Russian tanker in the Mediterranean Sea for the first time, after earlier attacks on Lukoil facilities in the Caspian Sea. On Sunday, US and Ukrainian officials said talks in Miami were “productive and constructive,” though no breakthrough was announced.

The downside of the USD/CAD pair could be restrained as the US Dollar (USD) could gain ground due to cautious sentiment surrounding the Federal Reserve’s (Fed) policy outlook. Federal Reserve Bank of Cleveland President Beth Hammack said on Sunday that monetary policy is in a good position to pause and assess the effects of the 75-basis-point (bps) rate cuts on the economy during the first quarter, according to Bloomberg.

The CME FedWatch tool shows a 79.0% probability of rates being held at the Fed’s January meeting, up from 75.6% a week earlier. Meanwhile, the likelihood of a 25-basis-point rate cut has fallen to 21.0% from 24.4% a week ago.

The University of Michigan reported on Friday that the Consumer Sentiment Index was revised downward to 52.9 in December from 53.3 previously. Consumer Expectations Index fell to 54.6 from 55.0. Meanwhile, One-year Inflation Expectations were revised up to 4.2% from 4.1% in both the initial estimate and the prior month.