The Canadian Dollar made a recovery on Friday, thanks to a shift in investor risk appetite and positive economic data from the US. Despite Canada experiencing a decline in Retail Sales in March, there was an overall improvement in market sentiment, leading to a decline in the US Dollar. US Durable Goods Orders exceeded expectations, and the Consumer Sentiment Index also showed positive results.
Canadian Retail Sales fell in March, missing forecasts for a recovery. The US Durable Goods Orders in April, however, showed an increase, surpassing expectations. The University of Michigan’s Consumer Sentiment Index also came in higher than expected. These positive economic indicators contributed to the recovery of the Canadian Dollar and improved market sentiment.
The Canadian Dollar had a mixed performance against major currencies throughout the week, with strong gains against the Australian Dollar. Technical analysis shows that despite a slight rebound on Friday, the Canadian Dollar remained lower against most major currencies compared to the start of the week. The USD/CAD pair saw some fluctuations but remained on the higher side towards the end of the week.
The Durable Goods Orders economic indicator released by the US Census Bureau measures orders for goods like motor vehicles and appliances, providing insights into the US production activity and the overall economic situation. A higher reading is typically bullish for the USD. The recent data showed an increase in orders, exceeding expectations, which contributed to the positive market sentiment and helped in the recovery of the Canadian Dollar.
Overall, the Canadian Dollar faced some challenges during the week due to weak economic data from Canada, particularly in Retail Sales. However, positive indicators from the US economy and improved market sentiment led to a recovery in the CAD’s value. Investors will continue to monitor economic data and market sentiment for further insights into the performance of the Canadian Dollar in the coming weeks.
