- USD/CAD stays within a touching distance of multi-year lows.
- US Dollar Index holds steady around 89.90 ahead of key data releases.
- Rising crude oil prices help CAD outperform its rivals.
The USD/CAD pair showed no immediate reaction to the Canadian growth data and continues to trade in the negative territory ahead of key data releases from the US. At the moment, the USD/CAD pair is down 0.27% on the day at 1.2030 and stays within a touching distance of the multi-year lows it set at 1.2011 on May 18.
Rising crude oil prices boost CAD
The data published by Statistics Canada revealed on Tuesday that the Real Gross Domestic Product (GDP) expanded at a monthly rate of 1.1% in March, beating the market expectation of 1% by a small margin. On a negative note, the Real GDP grew by 5.6% on a quarterly basis in the first quarter, compared to analysts’ estimate of 6.7%.
Meanwhile, the barrel of West Texas Intermediate is trading at its highest level since October 2018 at $68.55, rising 2.5% on a daily basis and helping the commodity-sensitive loonie outperform its rivals.
Later in the session, the IHS Markit will release the May Manufacturing PMI for both the US and Canada. The ISM Manufacturing PMI will be featured in the US economic docket as well. Ahead of these releases, the US Dollar Index stays relatively quiet around 89.90, allowing CAD’s valuation to continue to drive USD/CAD’s movements. Investors are likely to pay close attention to the Prices Paid Index component of the ISM’s report.
Technical levels to watch for