Rising Oil Prices Help Canadian Dollar Ignore Unfavorable Data

The Canadian dollar was generally firm today despite unfavorable domestic macroeconomic data. The likely reason for the loonie’s good performance was the sharp rally of prices for crude oil, Canada’s major source of export revenue.
The North American grade of crude oil jumped almost 4% in New York today due to a range of factors. One of them was a tweet from US President Donald Trump that suggested that the world’s two biggest economies may resume trade negotiations.
The rising oil prices allowed the loonie to ignore the report from Statistics Canada, which showed a drop of manufacturing sales by 0.6% in April instead of an increase at the same rate predicted by analysts. The decline followed the 2.6% gain in March (positively revised from a 2.1% increase).
Now, traders wait for tomorrow’s release of Canada’s Consumer Price Index. Analysts predicted that the report will show a slowdown of consumer inflation from 0.4% to just 0.1%.
USD/CAD declined from 1.3412 to 1.3392 as of 15:36 GMT today after rallying to the session maximum of 1.3432 earlier. EUR/CAD opened at 1.5044, rallied to the day’s high of 1.5083, but pulled back to 1.4987 later. CAD/CHF climbed from 0.7446 to 0.7471, rebounding from the session low of 0.7423.

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