The Canadian dollar fell against its US rival on Tuesday, as the oil rally ended as a result of profit taking by investors, since the market focused on the meeting of the Bank of Canada this week.
USD/CAD rose 0.30% to 1.3310. On Monday, the pair reached 1.3235, the lowest level since October 21.
Oil prices fell on Tuesday from 16-month highs after there was evidence that the OPEC oil production reached in November another record high.
Last week, OPEC managed to sign an agreement on the production cut, which can reduce the excess reserves of the world.
The increase in production before the agreement to reduce production comes into force in January caused concerns that the global excess reserves can continue in 2017.
The fall in oil prices was compensated by a positive report, indicating the reduction of the Canadian trade deficit in October.
Statistics Canada reported that the trade deficit fell to 1.13 billion Canadian dollars to a record 4.38 billion Canadian dollars in September.
Imports decreased by 6.3% to 44.71 billion Canadian dollars, reaching the lowest level since February 2015, while exports increased by 0.5% to 43.58 billion Canadian dollars.
Meanwhile, investors are waiting for the upcoming meeting of the Bank of Canada on Wednesday.
The encouraging employment data released on Friday reinforced expectations that the Bank of Canada will still leave interest rates unchanged.
In October, the bank kept interest rates unchanged, but said it was considering a decline for the third time in two years.
In the US, data showed that the trade deficit widened to a four-month high of $ 42.6 billion in October from a revised $ 36.2 billion in September, as imports increased to a maximum of the last 14 months.
A separate report showed that labor productivity in the non-manufacturing sector of the US demonstrates a recovery in the third quarter, registering the fastest growth rate in two years.
The dollar rose against a basket of major currencies by 0.27% to 100.43.
Demand for the dollar is still supported on expectations that the Fed will raise interest rates at the FOMC meeting next week.