USD/CAD climbs above 1.3070 as DXY turns positive on the day
- USD/CAD staged a decisive rebound after dropping below 1.3000.
- US Dollar Index turned positive on the day above 92.00 in the last hour.
- Upbeat ISM Manufacturing PMI data from the US helped USD gather strength.
After slumping to its lowest level since January at 1.2993 on Tuesday, the USD/CAD pair staged a decisive rebound during the American session and was last seen gaining 0.22% on the day at 1.3075.
USD gathers strength on upbeat PMI data
The upbeat macroeconomic data releases from the US seem to be providing a boost to the greenback in the second half of the day. The US Dollar Index, which touched its lowest level in more than two years at 91.75 earlier in the day, turned positive on the day at 92.20 and helped USD/CAD push higher.
In its closely-watched report, the Institue for Supply Management (ISM) revealed that the economic activity in the US' manufacturing sector in August expanded at its strongest pace since January 2019. The ISM Manufacturing PMI climbed to 56 and beat the market expectation of 54.5. Additionally, the Markit Manufacturing PMI improved from 50.9 in July to 53.1. in August.
On the other hand, the Markit Manufacturing PMI for Canada jumped to 55.1 in August from 52.9 but failed to help the loonie stay resilient against its American counterpart.
Meanwhile, the barrel of West Texas Intermediate (WTI) is up around 1% on the day at $43.25 and USD/CAD find it difficult to extend its rally if crude oil preserves its bullish momentum in the remainder of the day.
Technical levels to watch for