USD/CAD closes in on 1.2600 on USD strength, oil decline
- USD/CAD continues to push higher during the American session.
- US Dollar Index extends rebound, rises above 92.40.
- WTI is falling for the third straight trading day.
After spending the Asian trading hours in a tight range above 1.2500, the USD/CAD pair gained traction and reached a session high of 1.2599. As of writing, the pair was up 0.45% on the day at 1.2595.
WTI declines toward $69
The renewed USD strength and crude oil's poor performance on Tuesday are fueling USD/CAD's upside. Following last Friday's sharp decline, the US Dollar Index (DXY) closed in the positive territory on Monday and preserves its firm footing on Tuesday. In the absence of significant fundamental drivers, the cautious market mood is helping the USD find demand and the DXY is currently rising 0.23% at 92.42.
On the other hand, the barrel of West Texas Intermediate, which closed the last two trading days lower, is down more than 1% at $61.17, making it difficult for the commodity-related CAD to stay resilient against its rivals.
In the meantime, the benchmark 10-year US T-bond yield is rising nearly 3%, providing an additional boost to the USD.
There won't be any data releases featured in the Canadian economic docket in the remainder of the day. On Wednesday, the Bank of Canada will announce its Interest Rate Decision and release the Rate Statement following the September policy meeting.
Bank of Canada Preview: No policy change expected following July's taper.
Technical levels to watch for