On Friday, USD/CAD finally broke out of its losing streak that it has been in for the past few days when the dollar finally rebounded versus its Canadian counterpart. The effects of the FOMC’s decision to keep the current interest rates finally wore out of the greenback, enabling its gain over the commodity-related Canadian dollar.
At the time of writing, the pair is currently trading at 1.3112, with a high of 1.3115, around 1.62% more than Thursday’s high, and a low of 1.3027.
Oil markets have a massive effect on this pair, so investors must keep their eyes not only on the US and the Canadian economy, but also on the crude market. This pair is highly influenced by not only the Federal Reserve interest-rate policy in the United States, but the commodity markets as well. This is a currency that a lot of traders will use as a proxy for the crude oil markets, buying the Canadian dollar when it rises, in selling it when it falls.
Both crude benchmarks dropped almost 1%, extending its profit-taking slide, while the USD index trades 0.12% higher at 95.42 levels. These mostly contributed to the rise of the dollar versus the loonie.
Markets now eagerly look ahead as they wait for the fresh impetus from the upcoming Canadian data in absence of fresh fundamental data from the US side today. Said data that are slated to be announced today includes CAD Retail Sales MoM for July which is expected to be at 0.2% from the previous -0.1%, the Consumer Price Index MoM for August which is expected to be at 0.1% from the previous -0.2%, and Bank of Canada Consumer Price Index Core MoM for August, forecasted to be at 0.2% from the previous 0.0%. Consumer Price Index year-on-year for August is also expected to be at 1.4% from the previous 1.3%, and the Consumer Price Index Core year-on-year for August, forecasted to fall at 2.0% from the previous 2.1%.
Elsewhere, Fed’s Harker, Mester and Lockhart are on panel at the Philly Fed Conference later in the day. Markit US Manufacturing PMI for September is also slated to be released, predicted to remain unchanged at 52.
Investors are now watching for these events set for later in the day, and all of them are bound to have an impact on the rate of the USD/CAD pair.
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