Canadian Dollar Declines Against US Dollar on Weak Oil Prices

The USD/CAD currency pair today hit new three-week highs as the US dollar rallied against its Canadian counterpart even as global oil prices retreated from 5-month tops. The US dollar rallied into the American session disregarding the release of disappointing new home sales data and weak consumer confidence data.

The USD/CAD currency pair rallied by about 40 points from its opening price to hit new three-week highs above 1.2400, but had retraced some of its gains at the time of writing.

Today’s rally was an extension of a sustained recovery move by the currency pair, which has rallied from 28-month lows hit earlier this month, after the Bank of Canada decided to hike interest rates. The currency pair has so far recovered about 340 points from its multi-year lows. The commodity-linked loonie declined against the greenback today as global crude oil prices, as tracked by the West Texas Intermediate, retreated from 5-month tops around $52.50.

The US dollar was largely stronger against the loonie in today’s session even as the US Dollar Index, which tracks the greenback’s performance, hit new highs above 93.20. The greenback shrugged off disappointing new home sales data released by Census Bureau and the weak Conference Board‘s consumer confidence index.

The currency pair’s future performance is likely to be affected by Janet Yellen‘s speech scheduled for 16:45 GMT today and BoC Governor Stephen Poloz‘s speech tomorrow.

The USD/CAD currency pair was trading at 1.2380 as at 15:59 GMT having rallied from a low of 1.2351 earlier today. The CAD/JPY currency pair was trading at 90.61 having rallied from a low of 90.07 in the Asian session.

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