USD/CAD hits highest since October

• USD/CAD hits multi-month highs as oil takes a beating. 
• Investors are adding bets to position for gains in USD/JPY, options market data shows. 

The Canadian dollar is on the offer in Asia and is powering gains in the USD/CAD pair. 

The currency pair rose to 1.3348 a few minutes ago to hit the highest level since Oct. 3 and was last seen trading at 1.3338, representing marginal gains on the day. 

Oil drops

West Texas Intermediate (WTI) oil is currently trading at a 13-month low of $48.07, representing a nearly 10% drop on a week-to-date basis. 

The black gold has come under pressure, possibly due to coronavirus-led risk aversion in the equity markets and seems to be weighing over the loonie. After all, oil is one of Canada's major exports. 

Call demand spikes

One-month risk reversals, a gauge of calls to puts, jumped to 0.425 on Wednesday, to hit the highest level since March 2018. The gauge has in a V-shaped manner from -0.20 to 0.425 in the last four days. 

The data indicates the investors are adding bets (call options) to position for a sustained rally in the USD/CAD pair. 

Technical levels