USD/CAD remains depressed below 1.3600 amid softer USD

• USD/CAD extends the previous day’s decline on Tuesday in the Asian session.
• Mixed economic data, oil prices influence Loonie’s performance.
• The US Dollar Index remains weaker near 93.80 despite higher US T-yields.

The USD/CAD pair remains muted on Tuesday. After testing the high of 1.2775 in the previous week, the pair continued to grind lower for the fourth -straight session. At the time of writing, USD/CAD is trading at 1.2586, down 0.01%  for the day.

The depreciative move in the US dollar keeps USD/CAD on the lower grounds. The US Dollar Index (DXY), which measures the performance of the greenback against its six major rivals, trades near 93.82, down 0.24%. The buck diverges from the US 10-year benchmark Treasury yields, which stands at 1.48% with 0.03% gains.

Investors digested the Fed tapering expectations as soon as November amid rising inflation and rate hike next year. The US President Joe Biden said on Monday that the government could breach its $28.4 trillion debt limit in a historic default unless Republicans joined Democrats in voting to raise it in the next two weeks.

On the other hand, the loonie gained traction despite mixed economic data. The Canada Building Permits declined 1.2% in August. A pull back in WTI prices limits the gain for the Canadian dollar.

As for now, traders are waiting for the Canada International Merchandise Trade, US ISM Service PMI, to take fresh  trading impetus.

USD/CAD additional levels