USD/CAD finds support near 1.3150 as oil recovery loses momentum
- WTI falls into negative territory after refreshing multi-week highs.
- US Dollar Index clings to modest daily gains on Tuesday.
- Building permits in Canada rose sharply in July.
The USD/CAD pair spent the first half of the day moving sideways below the 1.32 handle but came under a renewed pressure during the American trading hours and touched its lowest level since late July at 1.3131 as rising crude oil prices allowed the commodity-sensitive Loonie to outperform the Greenback.
CAD capitalizes on oil rally before market mood changes
However, with the crude oil rally losing its traction in the last few hours, the pair recovered a small part of its daily losses and was last seen trading at 1.3150, erasing 0.1% on a daily basis.
Earlier today, hopes of OPEC+ committing to additional output cuts boosted crude oil prices. The barrel of West Texas Intermediate rose to its highest level in five weeks at $58.74 but reversed its direction. However, news of US President Trump's national security adviser Bolton resigning triggered an oil sell-off as it was assessed as a development that would ease fears over a conflict in the Middle-East. At the moment, the barrel of WTI is down nearly 1% on the day at $57.30.
Today's data from Canada showed that following a 3.1% contraction in June, building permits rose 3% in July and provided an additional boost to the CAD.
On the other hand, the lack of major macroeconomic data releases from the United States allowed the US Dollar Index to preserve yesterday's recovery gains and caused the pair to limit its losses.
Technical levels to consider
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
