The Canadian dollar today declined against its US counterpart after the release of weak Canadian retail sales data in the early American session. The Canadian dollar was slightly stronger against the US dollar earlier in today’s session as the USD/CAD currency pair extended yesterday’s decline following the dovish FOMC minutes.
The USD/CAD currency pair opened today’s session on a downtrend where it hit a low of 1.2675 before the release of the retail sales. After the release, the pair rallied by over 50 points to hit a new daily high of 1.2729.
The release of the dismal retail sales data for September by Statistics Canada is what triggered the currency pair’s rally. The retail sales increased by 0.1% to $49.1 billion on a monthly basis in September and came in below analysts’ expectations of 0.9%. The currency pair’s strong reaction to the retail sales data can be attributed to the low trading volumes in the North American market as US markets remain closed.
The rebound in global oil prices as tracked by the West Texas Intermediate made the commodity-linked loonie much stronger against the greenback. The WTI rallied higher during today’s session to hit a high of $58.40 as the market priced in low US crude oil inventories and the extension of OPEC-led production cuts.
Given that the US markets are closed for the Thanksgiving holiday, global oil prices are likely to be the main driver of the pair’s performance over the short-term.
The USD/CAD currency pair was trading at 1.2713 as at 15:37 GMT having retraced some of its daily gains due to higher crude oil prices. The CAD/JPY currency pair was trading at 87.50 having declined from a high of 87.76 earlier today.
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