Canadian Dollar Declines Against US Dollar on Positive US Data

The Canadian dollar today declined against the US dollar following the release of upbeat US data and a rebound in the US dollar. The release of the Canadian housing price index in the early North American session also contributed to the loonie’s overall weakness.

The USD/CAD currency pair started today’s session on a dip then rallied higher from its daily lows to hit a high of 1.2490, but had retraced some of its gains at the time of writing.

The weaker loonie and a strong US dollar led to the USD/CAD pair rallying higher during the early European session. The release of the Canadian housing price index by Teranet and National Bank of Canada also contributed to the pair’s rally as the HPI did not meet expectations. The HPI recorded a 0.1% increase as compared to the market consensus of a 0.2% increase. The sharp fall in crude oil prices as tracked by the West Texas Intermediate also contributed to the commodity-linked loonie’s weakness.

The modest greenback rebound as tracked by the US Dollar Index triggered the pair’s initial rally. The release of the upbeat initial jobless claims data by the Department of Labor also contributed to the pair’s rally.

The currency pair’s future performance is likely to be affected by global oil prices and tomorrow’s releases from the US docket such as the CPI data and the advance retail sales data.

The USD/CAD currency pair was trading at 1.2475 as at 16:20 GMT having rallied from a low of 1.2430 in the European session. The CAD/JPY currency pair was trading at 90.05 having dropped from a high of 90.35 at the start of today’s session.

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