The Canadian dollar today rallied against its American counterpart following the release of upbeat Canadian retail sales data for June, but the rally was short-lived. The USD/CAD currency pair today extended its gains from yesterday as the US dollar proved to be much stronger against the loonie driven by several factors including the less-dovish Fed minutes.
The USD/CAD currency pair today rallied from an opening low of 1.3294 to a high of 1.3338 in the early American session before retracing over half of its gains after the Canadian release.
The currency pair’s initial rally was largely supported by the greenback’s strength as tracked by the US Dollar Index. The loonie’s weakness was related to news that the European Union would halt all imports of Canadian cherries and other fresh fruits due to new import rules. The loonie was also affected by the weakness in global crude oil prices as tracked by the West Texas Intermediate, which hit a low of 53.41. The release of the Canadian retail sales data for June by Statistics Canada boosted the loonie triggering a decline in the currency pair.
The currency pair’s rally was further hindered by the dovish comments uttered by James Bullard the President of the Federal Reserve Bank of St. Louis. China’s promise to impose tariffs on US oil, which includes Canadian oil, also weighed on the loonie.
The currency pair’s short-term performance is likely to be affected by Jerome Powell’s speech at the Jackson Hole Economic Symposium scheduled for 14:00 GMT.
The USD/CAD currency pair was trading at 1.3315 as at 13:54 GMT having dropped from a high of 1.3338. The CAD/JPY currency pair was trading at 79.95 having fallen from a high of 80.14.
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