USD/CAD stays in red near 1.3250 despite USD strength

• Crude oil rally helps loonie stay strong on Friday.
• US Dollar Index looks to close the day at its highest level since January 2.
• Inflation rises more than expected in Canada.

The USD/CAD pair failed to hold above the 1.33 mark on Thursday and lost its traction on Friday as the commodity-sensitive loonie took advantage of the crude oil's strong recovery. As of writing, the pair was trading at 1.3253, losing 0.15% on the day.

After struggling to make a decisive move above $52 earlier this week, the barrel of West Texas Intermediate finally pushed higher today and advanced to its highest level in nearly 6 weeks at $53.88. Today's data from the U.S. revealed that the number of active oil rigs fell to 852 from 873 last week and provided an additional boost to the WTI.

Earlier in the day, the data published by Statistics Canada showed that the consumer price index in December rose to 2% on a yearly basis to beat the market expectation of 1.7% and helped the CAD outperform its rivals. 

On the other hand, despite the oil's impressive performance, the broad-based USD strength in the session didn't allow the pair to extend its losses. Although today's data from the U.S. showed that the consumer sentiment continued to deteriorate in January, the sharp increase seen in the T-bond yields boosted the demand for the greenback and lifted the US Dollar Index to its highest level since early January at 96.40. As of writing, the DXY was up 0.25% on the day at 96.32.

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