USD/CAD drops to session lows near 1.3280 on oil recovery
- WTI looks to settle above $58 with modest gains.
- US Dollar Index stays near 98.30 following mixed data.
- Coming up on Wednesday: Second estimate of Q3 GDP growth from US.
After spending a large portion of the day moving sideways above the 1.3300 mark, the USD/CAD pair lost its traction during the American trading hours and touched a fresh daily low of 1.3251 as rising crude oil prices helped the commodity-sensitive CAD gather strength against its rivals. As of writing, the pair was trading at 1.3285, losing 0.09% on a daily basis.
Crude oil rises on hopes of longer output cuts
Reports suggesting that the Organization of the Petroleum Exporting Countries (OPEC) is unanimously supporting an extension to the oil output reduction agreement ahead of next week's meeting provided a boost to crude oil prices on Tuesday. According to Russian news agency TASS, members are discussing whether the extension will be for three months or six months. The barrel of West Texas Intermediate was last seen trading at $58.20, adding 0.55% on the day.
On the other hand, the US Dollar Index struggled to break out of its tight two-day range and allowed the CAD's market valuation drive the pair's action.
Today's data releases from the US revealed that the trade deficit narrowed to $66.53 billion in October (preliminary) from $70.55 billion in September and Housing Price Index came in at 0.6% to beat the market expectation of 0.2%. On a negative note, the Conference Board's Consumer Confidence Index fell to 125.5 in November and fell short of analysts' estimate of 127. The US Dollar Index struggled to find direction following these numbers and was last virtually unchanged on the day at 98.30.
On Wednesday, investors will be paying close attention to the US Bureau of Economic Analysis' second estimate of the US Gross Domestic Product (GDP) growth data for the third quarter.
Technical levels to watch for