USD/CAD Rallies Higher on Mixed US Releases

The USD/CAD currency pair today rallied slightly higher as the Canadian dollar weakened against its US counterpart following mixed US macro releases. The loonie was largely weaker against the greenback despite slightly positive crude oil prices, which usually boost the currency.

The USD/CAD currency pair today rallied slightly higher from a low of 1.3043 to a high of 1.3098, but was unable to break above the crucial 1.3100 psychological barrier.

The currency pair extended yesterday’s rally where it broke above the vital 1.3000 level in the early American session and ended the day above that key level. The release of the weak Canadian manufacturing sales data for January by Statistics Canada also contributed to the pair’s rally. The slightly positive crude oil prices as tracked by the West Texas Intermediate could not boost the loonie. The negative investor sentiment towards the Canadian dollar seems to be caused by fears that Canada would be the loser in an all-out trade war with the USA.

The release of the University of Michigan consumer sentiment survey, which came in at 102 versus the expected 99.3, also triggered a brief rally in the pair. The release of the US housing starts data by the Census Bureau had a muted impact on the pair as the print was below expectations.

The currency pair’s future performance is likely to be affected by political events in both Canada and the USA given the upcoming weekend.

The USD/CAD currency pair was trading at 1.3094 as at 16:00 GMT having rallied from a low of 1.3043. the CAD/JPY currency pair was trading at 81.04 having dropped from a high of 81.44.

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