The USD/CAD currency pair today extended yesterday’s gains as the Canadian dollar dropped against the greenback amid the ongoing as the global crude oil selloff. The pair’s rally was further accelerated by news reports that a US Federal Court had stopped the construction of the Keystone XL pipeline that connects Canadian oilfields to Texas oil pipelines.
The USD/CAD currency pair today rallied from an opening low of 1.3139 to a high of 1.3198 and was near these highs at the time of writing.
The pair’s rally started yesterday after the FOMC rate decision where the US dollar rallied against most of its peers. The weak global crude oil prices also contributed to the loonie’s decline even as a barrel of West Texas Intermediate crude oil dropped to new 7-month lows below $60. Media reports that Canada was pushing back against attempts by the US to change the terms of their September trade deal also weighed on the loonie. The fact that the global supply of crude oil is not declining despite the US sanctions on Iran also weighed heavily on the Canadian dollar.
The greenback’s rally as tracked by the US Dollar Index, which hit a high of 96.92 today, also contributed to the loonie’s decline. The FOMC’s confidence in the US economic outlook also boosted the pair.
The pair’s short-term performance is likely to be affected by global oil prices, the release of US PPI data and preliminary UoM consumer sentiment data later today.
The USD/CAD currency pair was trading at 1.3188 as at 12:56 GMT having rallied from a low of 1.3139. The CAD/JPY currency pair was trading at 86.31 having dropped from a high of 86.72.
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