USD/CAD rebounds from multi-year lows, trades above 1

USD/CAD rebounds from multi-year lows, trades above 1.2800

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  • USD/CAD dropped to its lowest level since May 2018 on Tuesday.
  • WTI posts modest losses near $45.50 ahead of API data.
  • US Dollar Index is edging higher toward 91.00.

The USD/CAD pair slumped to its lowest level since May 2018 at 1.2766 on Tuesday but staged a rebound during the American trading hours. As of writing, the pair was up 0.12% on the day at 1.2812.

Investors await next significant catalyst

Earlier in the day, rising crude oil prices helped the commodity-related CAD gather strength against the greenback. After losing more than 1% and closing at $45.60 on Monday, the barrel of West Texas Intermediate (WTI) recovered to $45.90 in the European session. However, the WTI lost its traction and is now posting small losses at $45.50 ahead of the American Petroleum Institue’s Weekly Crude Oil Stock data.

On the other hand, a technical correction witnessed in the US Dollar Index (DXY) is allowing USD/CAD to stay in the positive territory. At the moment, the DXY is up 0.15% on the day at 90.92. In the meantime, Wall Street’s main indexes trade mixed and fail to provide a clue regarding the market sentiment.

Earlier in the day, the US Bureau of Labor Statistics reported that Unit Labor Costs in the third quarter fell by 6.6%. Although this reading came in better than the market expectation for a decline of 8.9%, it failed to trigger a market reaction.

On Wednesday, the Bank of Canada will announce its Interest Rate Decision and publish the policy statement.

Technical levels to watch for

Credit: FX Street

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