Canadian Dollar Rallies Against US Peer on Strong Oil Prices, Later Falls

The  Canadian dollar today rallied against its US peer as  oil prices hit new multi-month highs before giving up its gains and  heading lower. The  USD/CAD currency pair later recouped most of  its losses as  oil lost its lustre at  a  crucial resistance level dragging the  loonie lower.
The  USD/CAD currency pair today fell from an  opening high of  1.3308 to  a  low of  1.3233 before reversing and  rallying almost to  its opening price by  the  time of  writing.
The  currency pair headed lower as  the  commodity-linked loonie rallied buoyed by  rising crude oil prices as  tracked by  the  West Texas Intermediate, which hit a  high of  43.49 today. The pair’s bottom closely followed the release of the mixed Canadian International merchandise report for June. According to  Statistics Canada, the  country’s exported goods worth $39.71 billion in  June, while importing goods worth $42.9 billion, resulting in  a  higher than expected trade deficit. The  pair’s rally was also boosted by  the  greenback’s overall weakness as  tracked by  the  US Dollar Index, which hit a  low of  92.56.
The  pair later recouped most of  its losses as  global crude oil prices fell despite the  U.S. Energy Information Administration reporting that US crude oil supplies fell by  7.4 million barrels versus the  expected 4.1 million barrels. The  release of  upbeat US ISM Non-manufacturing PMI for  July also fueled the  pair’s recovery.
The  currency pair’s future performance is likely to  be affected by  crude oil prices and  US dollar dynamics.
The  USD/CAD currency pair was trading at  1.3278 as  of  19:20 GMT, having recovered from a  low of  1.3233. The  CAD/JPY currency pair was trading at  79.52, having fallen from a  high of  79.86.
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