The Canadian Dollar (CAD) struggled to surpass the US Dollar (USD) on Friday after the US Purchasing Managers Index (PMI) exceeded expectations, boosting the Greenback and leaving the CAD in second place. While Canada experienced a rise in core Retail Sales in April, industrial and raw material prices fell in May, limiting the Canadian Dollar’s gains. Despite this, the CAD remains higher against the USD for the week, holding onto a fifth of a percent from Monday’s opening bids. The US PMIs rose in June, pushing the USD higher across the board, overshadowing the Canadian data.
The daily market movers included a surge in Canadian core Retail Sales by 1.8% in April, the highest monthly gain since July 2022, exceeding market expectations. However, the Canadian Raw Material Price Index declined by 1.0% in May, more than the anticipated decrease of -0.6%, while Canadian Industrial Produce Prices remained flat in May, below the 0.5% forecast. On the other hand, the US S&P Global Manufacturing PMIs beat forecasts, with the Manufacturing PMI at 51.7 in June. Both the US Services PMI and Manufacturing PMI outperformed market expectations, showing an upward trend.
Looking ahead, the Bank of Canada Governor will appear on Monday, followed by Canada’s Consumer Price Index (CPI) inflation data and the Bank of Canada’s CPI core print on Tuesday. The Canadian Dollar’s performance against major currencies today showed fluctuations, with the CAD being strongest against the Japanese Yen. The technical analysis for the CAD on Friday revealed mixed performance, with gains and losses balanced. The USD/CAD pair bounced higher, testing resistance levels and consolidating as traders navigate intraday technical challenges.
Factors influencing the Canadian Dollar’s performance include interest rates set by the Bank of Canada, Oil prices, the country’s economic health, inflation, and the Trade Balance. The Bank of Canada plays a significant role in setting interest rates and influencing credit conditions, impacting the CAD. Oil prices, as a key export for Canada, also play a crucial role in the CAD’s value. Inflation and macroeconomic data releases such as GDP, PMIs, and employment data can also influence the Canadian Dollar’s direction. Overall, a strong economy and positive data can lead to a stronger Canadian Dollar.
