The Canadian Dollar (CAD) continued to weaken on Thursday, hitting 30-week lows due to a lack of meaningful economic data from Canada. Investors are focusing on upcoming US Purchasing Managers Index (PMI) figures for May, which could potentially surprise on the upside. CAD traders are eagerly waiting for Friday when Canada will release Retail Sales data for March, along with US Durable Goods Orders and the University of Michigan’s Consumer Sentiment Index.
The recent market movements show that Canadian New Housing Price Index rose 0.2% in April, slightly higher than expectations. Additionally, US Initial Jobless Claims eased to 215K in the week ended May 17, below forecasts. The US S&P Global Manufacturing PMI also recovered to 50.9 in May, exceeding expectations. As a result, hopes for a rate cut from the Federal Reserve in September have decreased significantly, with rate markets now pricing in low odds of a quarter-point cut.
The Canadian Dollar’s performance against major currencies today shows that it was weakest against the Swiss Franc. The technical analysis reveals that USD/CAD broke above 1.3700 on Thursday, rising to a two-week high. The pair is on track to close higher for a fourth consecutive day, signaling a bullish rebound. However, USD/CAD is still below the last major swing high in mid-April at 1.2850.
Looking ahead, the Retail Sales data from the US Census Bureau is scheduled for release on June 18, 2024. This data measures the total receipts of retail and food stores in the US and provides insight into consumer spending, a key driver of the US economy. A high reading is typically seen as bullish for the US Dollar, while a low reading is viewed as bearish. The Retail Sales data is closely monitored by investors for its impact on the currency market.
In conclusion, the Canadian Dollar’s weakness is driven by a lack of support from Canadian economic data and a focus on US economic indicators. The upcoming Retail Sales data from Canada and other key reports will be closely watched by traders for potential market-moving implications. The performance of the Canadian Dollar against major currencies, along with technical analysis of USD/CAD, will continue to shape trading decisions in the coming days. Investors will also keep an eye on the Retail Sales data release from the US and its impact on the USD.
