USD/CAD fails to hold above 1.3300 despite crude oil selloff
- US Dollar Index slumps into London fix on Friday.
- Barrel of WTI erases more than 4% ahead of OPEC meeting.
- Canadian economy grew more than expected in third quarter.
The volatility surrounding the USD/CAD pair heightened during the American trading hours amid month-end flows and a sharp drop in crude oil prices. After climbing to a daily top of 1.3314 earlier in the session, the pair slumped to 1.3275 and was last seen trading at 1.3290, adding 0.1% on a daily basis.
Canadian economy picks up steam in Q3
The data published by Statistics Canada on Wednesday revealed that the Gross Domestic Product expanded by 1.3% in the third quarter to come in slightly better than the market expectation of 1.2% to help the CAD gather strength in the early trading hours of the American session.
Commenting on the underlying details of the report, "Business investment was a key driver to Q3 growth which will come as a relief to the BoC, given their concern with the global outlook," said TD Securities analysts. "We don't expect this to drive a hawkish pivot next week, but it should allow them some added comfort as they remain on the sidelines."
Meanwhile, crude oil came under strong selling pressure in the second half of the day amid fading hopes of OPEC extending its oil output cuts. Furthermore, investors seem to be looking to book their profits ahead of next week's meeting. As of writing, the barrel of West Texas Intermediate was trading at $55.75, losing 4.3% on a daily basis.
On the other hand, after advancing to its highest level in more than a month at 98.55, the US Dollar Index reversed its course and dropped to 98.23 in the last hour. The fact that there were no fundamental drivers behind that move suggested that it was caused by month-end flow into London fix. At the moment, the index is flat on the day at 98.30.
Technical levels to watch for