Investing.com - The Canadian dollar extended gains against its U.S. counterpart on Tuesday after data showing that the Canadian economy grew in line with forecasts in August.
USD/CAD was down 0.31% at 1.3361 from around 1.3380 ahead of the release of the data.
The economy expanded 0.2% in August, Statistics Canada reported, matching forecasts, but slowing from a downwardly revised 0.4% advance in July.
Growth was mainly driven by increased activity across the goods producing industries, including mining.
Activity in the mining and oil and gas extraction sector rose 1.4%, on the back of an increase in potash mining amid higher export demand.
Oil and gas extraction rose 0.9% as production returned to levels seen before wildfires in northern Alberta in May.
The loonie had fallen sharply against the U.S. dollar on Monday, re-approaching last Friday’s seven-month lows, as oil prices fell. Oil is one of Canada’s main exports.
The Canadian dollar ended September down 2.2% against the greenback after the Bank of Canada acknowledged that it had considered cutting interest rates at its latest meeting.
Later Tuesday, Canada’s government was to provide updated estimates for its budget deficit and for economic growth.
Meanwhile, the greenback fell to the day’s lows against a basket of the other major currencies as an ABC news poll showed Hillary Clinton a point behind Donald Trump ahead of the upcoming U.S. presidential election.
A poll conducted for ABC news showed that 46% of likely voters support Trump, compared with 45% for Clinton.
The poll showed that support for Clinton declined since the FBI said Friday it would review more emails related to her private email use while she was secretary of state.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.29% to 98.03, the lowest level since October 20.
The index gained 3% in October amid expectations for a December rate hike by the Federal Reserve, despite dropping last Friday amid the renewed controversy over Clintons emails.
Investors were also cautious ahead of Friday’s U.S. jobs report for October, which will be scrutinized for signs that the economy is on a strong enough footing to handle an interest rate hike this year.
The Fed will make its latest monetary policy announcement on Wednesday, but a rate hike ahead of the November 8 presidential election is seen as unlikely.
Investors currently price a 73% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.