- Loonie among worst performers on Tuesday, affected by crude oil slide.
- USD/CAD up almost 150 pips, on best daily performance in months.
- Bank of Canada to review its inflation targeting regime.
The USD/CAD pair rose further during the US session and broke above 1.3300 amid a stronger US dollar. It climbed to 1.3316, the highest since June 28 and near the end of the day is holding near the highs, consolidating gains.
So far the pair gained 140 pips during the last 24 hours, the biggest daily gains in months. The move higher took place amid a stronger US dollar, a collapse in crude oil prices and a risk-off environment.
The greenback rose across the board on the back of a sell-off in equity markets. The Dow Jones is down 2.45% and the Nasdaq 2.10%. The US Dollar Index erased yesterday losses and is back near 97.00.
Crude oil is collapsing and trades at the lowest in a year. The WTI barrel is down almost 7% dragging the loonie lower. The Canadian dollar is the worst performer among commodity currencies.
Carolyn Wilkins, Senior Deputy Governor at the Bank of Canada, said today that the central bank is preparing a review of its inflation targeting mandate, signaling that it indicates it is open to considering major changes.
USD/CAD Levels to watch
If the USD/CAD rises further resistance could be seen at 1.3330 and then at 1.3350 and 1.3380/85 (June highs). To the downside, support levels might be located now at 1.3270, followed by 1.3230 and 1.3185.
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