The USD/CAD pair fell as low as 1.3991 in over a week on Tuesday before showing a modest recovery in recent hours. At the time of writing, the pair was down 0.66% to 1.4015 on the day. Rising crude prices and market optimism helped CAD on Tuesday to maintain its strength against the dollar. The West Texas Intermediate (WTI) barrel rose above $ 27 in hopes that OPEC + will reduce crude oil production to balance the market.
However, with some reports claiming OPEC + was discussing a production decline for just three months, the STI forced to erase much of its daily profit. At the time of writing, the WTI is trading at $ 26.55, which still rises to about 1% on the day. On the other hand, with the risk aversion flows dominating the markets for the second day in a row, the dollar is struggling to find demand to keep the pair near its lows. Currently, the US Dollar Index, which tracks the USD’s return against a basket of six other major currencies, is down 0.9% at 99.90.
Later in the day, Canadian Ivey PMI data and the US IBD/TIPP economic optimism. they are looking for a new momentum. Investors, however, are likely to continue to respond to changes in crude oil prices and the dollar’s market valuation.