Canadian Dollar Rallies on High Oil Prices and Mixed Macro Data

The Canadian dollar today rallied higher against its US peer driven by high crude oil prices before the release of multiple fundamental reports from the Canadian docket. The USD/CAD currency pair today fell as the loonie rallied higher against the much weaker greenback amid a risk-on market environment as investors remain hopeful about the future.
The USD/CAD currency pair today fell from a high of 1.3950 in the Asian session to a low of 1.3868 in the American session and was trading near these lows at the time of writing.
The loonie’s rally was driven by the rallying crude oil prices as tracked by the West Texas Intermediate, which hit a high of 33.73 earlier today. The recent recovery in oil prices has been good for the commodity-linked loonie, which has rallied against most of its peers. The release of Canada’s consumer price index data for April had a muted impact on the pair despite the headline print missing analysts’ estimates. According  to Statistics Canada,  the country’s CPI contracted by 0.7% versus the expected 0.6%, and the core print was also lower than expected. However, Canada’s wholesale sales fell less than expected cushioning the pair from further declines.
The loonie was also boosted by the robust measures taken by the Canadian government to combat the COVID-19 outbreak in care homes. Several provinces have announced significant funding packages to curb the spread of the coronavirus as the country slowly reopens its economy.
The currency pair’s future performance is likely to be affected by crude oil prices and geopolitical events.
The USD/CAD currency pair was trading at 1.3882 as at 15:28 GMT having fallen from a high of 1.3950. The CAD/JPY currency pair was trading at 77.32 having risen from a low of 77.15.
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