USD/CAD extends downside below 1.3750 on weaker Retail Sales – Crypto News – Crypto News
Connect with us
Faces rejection near 1.3000 mark, bullish potential intact Faces rejection near 1.3000 mark, bullish potential intact

others

USD/CAD extends downside below 1.3750 on weaker Retail Sales – Crypto News

Published

1 year ago

on

  • USD/CAD extends decline near 1.3715 in Wednesday’s early Asian session.
  • The weaker Retail Sales report triggered speculation that Fed will start to cut interest rates in a few months.
  • Extended gains in crude oil prices continue to underpin the commodity-linked Loonie for the time being.

The USD/CAD pair trades in negative territory for the fourth consecutive day around 1.3715 during the early Asian session on Wednesday. The rise of crude oil prices to the two-month top provides some support to the commodity-linked Loonie. Additionally, weaker Retail Sales prompted traders to focus on the timing of Fed rate cuts again, which capped the upside for the pair.

Economic activity in the United States remained subdued in the second quarter. The US Retail Sales rose 0.1% MoM in May from a 0.2% decline in April, below the market expectation for an increase of 0.2%, the Commerce Department reported Tuesday. The US Dollar (USD) weakened against its rivals after the weaker-than-expected Retail Sales report as it fueled the likelihood that the Federal Reserve (Fed) will start to cut interest rates in a few months.

Fed officials maintain a cautious stance and emphasize that further confidence in good inflation readings is needed. On Tuesday, New York Fed President John Williams said that he expected interest rates to come down gradually as inflation eases. Boston Fed President Susan Collins stated that despite progress on inflation, price growth remained persistently over the Fed’s 2% inflation objective, adding that it is still too early to say whether or not inflation is on course toward the target.

On the Loonie front, extended gains in crude oil prices are likely to lift the Canadian Dollar (CAD) in the near term as Canada is the largest Oil exporter to the United States (US).

The Bank of Canada (BoC) Summary of Deliberations will be released later on Wednesday and traders will take more cues on prospects of additional interest rate cuts from the Canadian central bank. Last week, the BoC decided to cut its benchmark policy rate by 25 basis points (bps) to 4.75%, while signaling further cuts. Former BoC governor David Dodge said last week that the move made “good sense” and the timing of future rate cuts will depend on “the continued progress on inflation,”

 

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending