- Risk-off mood boosts demand for the greenback.
- Oil trades below $64 following yesterday’s drop.
- Coming up: Retail sales data from the U.S. and Canada.
The USD/CAD dropped below the 1.33 mark on Wednesday before staging a strong recovery and closing the day virtually unchanged near mid-1.33s. With the risk-off flows starting to dominate the FX markets, once again, the greenback gathered strength and lifted the pair to a fresh daily high above the 1.3370 mark. At the moment, the pair is up 0.22% on a daily basis at 1.3372.
Today’s disappointing Manufacturing PMI readings from Germany and the euro area revived concerns over the economic slowdown in the euro area becoming more severe and lasting longer than expected to trigger a flight-to-safety wave, which the greenback has been capitalizing on since the start of the year. At the moment, the US Dollar Index is up 0.3% on a daily basis at 97.30, reflecting the broad USD strength.
Later in the day, retail sales from Canada and the United States will be looked upon for fresh impetus. Earlier this week, the Bank of Canada’s Business Outlook Survey pointed out to a weakening business sentiment and if today’s data surprise to the downside, we could see the loonie facing a renewed selling pressure.
Additionally, weekly jobless claims data and preliminary Markit Manufacturing & Services PMI data from the U.S. and the ADP Employment report from Canada will be featured in the economic calendar as well.
Meanwhile, after closing the day in the negative territory amid the higher-than-expected in the U.S. crude oil inventories, the barrel of West Texas Intermediate is trading flat on the day near $63.70 today, making it tough for the commodity-sensitive loonie to grab investors’ attention.
Technical levels to consider