USD/CAD climbs to daily highs above 1.3170 on broad-based USD strength
- Business activity in US' non-manufacturing sectors expanded at a strong pace.
- US Dollar Index extends recovery on Tuesday on upbeat data.
- Crude oil rally limits the pair's upside for the time being.
The USD/CAD pair fell to 1.3110 area during the European trading hours as rising crude oil prices allowed the commodity-related loonie to continue to stay strong against its peers. However, the upbeat macroeconomic data releases from the United States provided a boost to the USD in the second half of the day and forced the pair to reverse its course. As of writing, the pair was up 0.2% on the day at 1.3175.
USD gathers strength on positive data
The data published by the Institue for Supply Management (ISM) revealed that the economic activity in non-manufacturing sectors expanded at a more robust pace than expected in October with the Non-Manufacturing Index (NMI) rising to 54.7 from 52.6 and beating the market expectation of 53.5. Additionally, the IBS/TIPP Economic Optimism Index improved to 52.9 in November 52.6.
The US Dollar Index, which gained 0.45% on Monday, rose to its highest level since October 17th at 98.01 supported by the data.
On the other hand, OPEC Secretary-General Mohammad Barkindo confirmed on Tuesday that they will be discussing deeper oil cuts at their last meeting of the year in December and helped crude oil extend its rally. The barrel of West Texas Intermediate (WTI) is adding more than 1% on the day and trading above $57 ahead of the American Petroleum Institue's weekly crude oil stock report.
Meanwhile, the only data from Canada showed that Canada's international trade deficit narrowed to $0.98 billion from in September from $1.65 billion in August.
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