The Canadian dollar today rallied higher against its US counterpart following the release of upbeat retail sales and inflation data in the early American session. This drove the USD/CAD currency pair to new lows as investors sold the US dollar and bought the loonie based on the strong economic releases.
The USD/CAD currency pair today dropped from a high of 1.3289 to hit a low of 1.3117 after the Canadian releases.
The currency pair headed lower due to a spike in selling pressure following the release of the Canadian retail sales data for May by Statistics Canada. The headline retail sales print surprised to the upside by recording 2.0% growth in May, which was much higher than the expected 1.0% expansion. The Canadian CPI data for June, which was also released at the same time, beat expectations by coming in at an annualized 2.5% versus the consensus estimate of 2.3% growth. The two releases indicated a solid expansion in Canada’s economy, which raised investors’ expectations of more rate hikes by the Bank of Canada.
Given the mostly empty US docket, the greenback was largely weighed down by President Donald Trump‘s criticism of Fed Chair, Jerome Powell‘s stance on interest rate hikes. The Canadian dollar was further supported by the rising crude oil prices as tracked by the West Texas Intermediate.
The currency pair’s future performance is likely to be affected by geopolitical events and global oil prices over the upcoming weekend.
The USD/CAD currency pair was trading at 1.3129 as at 14:44 GMT having dropped from a daily high of 1.3289. The CAD/JPY currency pair was trading at 85.09 having risen from a low of 84.58.
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