Ella 
The USD/CAD pair attracted some buyers for the second day in a row on Tuesday and looks set to build on an overnight rebound from the 1.3515 area or above one-week lows. Spot prices are currently trading around 1.3580, still supported by some follow-through USD buying, although bullish crude oil prices may limit further gains.
The U.S. Dollar Index (DXY), which tracks the greenback against a basket of currencies, has risen to its highest level since February 14 amid doubts about whether the Federal Reserve will cut interest rates three times this year. Upbeat data released by the United States showed that the manufacturing industry grew in March for the first time since September 2022, and investors therefore reduced their bets on the Federal Reserve’s interest rate cut in June. This remains supportive of rising U.S. Treasury yields, which in turn is bullish for USD/CAD.
In addition to this, risk aversion is another factor favoring the safe-haven dollar. Meanwhile, crude oil prices held steady near the five-month high hit on Monday on signs of improving demand and the risk of further escalation in tensions in the Middle East. This is seen as supporting the commodity-linked Canadian dollar, which in turn could hinder traders from placing a fresh round of bullish bets around the USD/CAD currency pair. Even from a technical perspective, the recent failure to break above the 1.3600 mark warrants caution.
