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The Canadian dollar CADUSD strengthened against its U.S. counterpart on Tuesday, adding to sharp gains the day before, as the possibility of central banks shifting away from aggressive tightening led to profit-taking in the high-flying greenback.

The loonie was trading 0.8% higher at 1.3610 to the greenback, or 74.02 U.S. cents, after touching its strongest intraday level since Sept. 23 at 1.3504. On Monday, it notched its biggest daily gain in more than two years.

“The move today is about the (U.S.) dollar leg,” said Christian Lawrence, senior cross-asset strategist at Rabobank. “This to me is more of a positioning clearout. The dollar moved a long way very, very quickly indeed.”

The U.S. dollar gave back some recent gains against a basket of major currencies and Wall Street rallied for a second straight day as Australia’s central bank raised interest rates less than expected, providing hope that the Federal Reserve would soon temper its rapid pace of interest rate hikes to tackle inflation.

The Bank of Canada has also been tightening aggressively. It’s governor, Tiff Macklem, is due to speak on Thursday.

Canadian economists are scrambling for a reliable measure to track underlying inflation as large and frequent revisions have dented the credibility of a key BoC yardstick, even as the central bank said it was sticking with its core measures.

Adding to support for the loonie, the price of oil, one of Canada’s major exports, rose by more than 3% to $86.24 a barrel on expectations of a large cut in crude output from the OPEC+ producer group.

Canadian government bond yields were mixed across the curve, with the 10-year easing half a basis point to 3.126%.

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