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  • USD/CAD looks to close the day at its highest level since early August. 
  • US Dollar Index extends rally, settles above 94.00.
  • WTI erased a large portion of its daily gains.

The USD/CAD pair spent the first half of the day fluctuating in a tight range above 1.3300 but regains its traction during the American trading hours. After climbing to its highest level since August 10th at 1.3376, however, the pair has gone into a consolidation phase and was last seen gaining 0.45% on the day at 1.3361.

USD continues to outperform its rivals

The broad-based USD strength fueled USD/CAD’s rally on Wednesday. Supported by upbeat macroeconomic data releases from the US, the US Dollar Index (DXY) advanced to its highest level in nearly two months at 94.31. At the moment, the DXY is up 0.3% on the day at 94.24.

The IHS Markit’s flash estimate showed on Wednesday that the Manufacturing PMI in September improved to 53.5 to beat the market expectation of 53.2. Moreover, the Composite PMI arrived at 54.4 to show that the business activity in the private sector continued to expand at a robust pace. Finally, the Housing Price Index rose by 1% in July and surpasses analysts’ estimate for an increase of 0.5%.

On the other hand, the weekly published by the US Energy Information Administration revealed that crude oil stocks in the US declined by 1.6 million barrels in the week ending September 18th. With this print coming in higher than the market estimate for a decrease of 2.3 million barrels, crude oil prices lost traction. The barrel of West Texas Intermediate (WTI), which rose to a daily high of $40.70, erased the majority of its gains and is currently trading with small gains at $39.80, making it hard for the loonie to stage a rebound.

Technical levels to watch for