USD / CAD touched its lowest level in nearly six years on Tuesday.
Rising crude oil prices boosted the CAD.
The US Dollar Index remains flat on the day below 90.00.
After spending the first half of the day moving sideways around 1.2050, the USD / CAD pair came under renewed downward pressure and touched its lowest level since June 2015 at 1.2005. However, late in the US session, the pair managed to rebound and was last seen trading sideways at 1.2056.
CAD capitalizes on rising crude prices
Hours earlier, the sharp rebound in crude prices provided a boost to the commodity-sensitive Canadian dollar. A barrel of West Texas Intermediate (WTI) reached its highest level since October 2018 at $ 68.85 on Tuesday before losing traction. Currently, WTI is still up 1.15% on the day at $ 67.70.
Meanwhile, data from Canada showed that real GDP expanded 1.1% in March, compared to analysts’ estimate of 1%, and Markit’s manufacturing PMI fell to 57 in May disappointing the market’s expectation of 57.9 .
On the other hand, the US manufacturing PMI improved to 61.2 in May, beating analysts’ estimate of 60.5. Despite the upbeat data, the dollar struggled to find demand with the major Wall Street indices starting the day decisively higher. However, the strong rally in US Treasury yields helped the USD pick up steam and triggered a rally in the USD / CAD. At the moment, the 10-year US Treasury yield is up 2% and the US dollar index appears to close the day flat around 89.80.
Technical levels
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