USD/CAD pares daily losses, steadies around 1.3100 after DXY rebound

After dropping to 1.3050 area during the European trading hours, the USD/CAD pair reversed its direction and climbed to a daily high of 1.3107. As of  |  23/11/2020 17:02
  • USD/CAD gained traction and rose above 1.3100 during American session.
  • Crude oil's upbeat performance helps CAD limit its losses.
  • Economic activity in US' private sector continued to expand in November.

After dropping to 1.3050 area during the European trading hours, the USD/CAD pair reversed its direction and climbed to a daily high of 1.3107. As of writing, the pair was trading at 1.3098, where it was virtually unchanged on a daily basis.

Earlier in the day, rising crude oil prices helped the commodity-sensitive CAD gather strength against its rivals. Supported by the optimism that coronavirus vaccines will lead to a steady recovery in energy demand, the barrel of West Texas Intermediate (WTI) rose to its highest level in more than two months at $43.33. As of writing, the WTI was trading near $43, gaining 1.4% on the day.

DXY advances toward 93 after PMI data

On the other hand, the renewed USD strength allowed USD/CAD to push higher despite crude oil's upbeat performance.

After the data published by the IHS Markit showed that the business activity in both the manufacturing and the service sector in the US continued to expand at an impressive pace in November, the greenback started to outperform its rivals.

US: Markit Manufacturing PMI improves to 56.7 in November vs. 53 expected.

Supported by a 3% increase in the 10-year US Treasury bond yield, the US Dollar Index (DXY) shot higher and touched a daily high of 92.80 after remaining stuck around 92 for the majority of the day.

Later in the session, Toni Gravelle, Deputy Governor of the Bank of Canada (BoC), and San Francisco Federal Reserve President Mary Daly will be delivering speeches.

Technical levels to watch for

 

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