,
Monday, 17 May 2021 03:08 GMT

USD/CAD - Canadian Dollar Takes Flight


(MENAFN - Baystreet.ca) The Canadian dollar chewed through support overnight. USD/CAD dropped through $1.2500 to test $1.2479 before inching back to $1.2490. The Canadian dollar is a beneficiary of a jump in crude oil and other commodity prices in a mildly risk positive environment.
Global equity indexes continue to grind higher and making new record highs daily. European bourses are modestly higher, and S&P 500 futures suggest a positive open on Wall Street.
West Texas Intermediate (WTI) oil prices climbed to $63.44/barrel overnight from a low of $60.58. The rally was sparked by the Energy Information Administration (EIA) reporting a 5.9 million barrel drop in U.S. crude inventories.
Increased geopolitical tensions underpin gold prices. The U.S. is planning sanctions against Russia for the perceived meddling in the U.S. election and cyber attacks. The European Union is planning sanctions because of Russia's troop buildup along the Ukraine border. The U.S. and China are squabbling after President Biden sent an unofficial delegation to Taiwan.
FX markets are ignoring the geopolitics and concentrating on the Fed interest rate outlook. Federal Reserve Chair Jerome Powell and his colleagues appear to have squashed bond trader efforts to boost Treasury yields after repeatedly insisting that monetary policy will remain unchanged "for some time."
U.S. Retail Sales are the main focus in a data-heavy economic calendar. March Retail Sales are expected to rise 5.9% m/m compared to the 3.0% drop in February. A substantial upside surprise could reignite inflation fears, especially if weekly jobless claims are lower than the expected 700,000.
Better-than-expected Australian employment data gave the Australian dollar a boost and indirectly supported the Canadian dollar, as both currencies are part of the commodity bloc.'
EUR/USD rejected an attempt to trade above $1.2000 and retreated to $1.1963. back to $1.1968. Prices are supported by reduced risks of higher U.S. interest rates and broad US dollar weakness. Traders are also looking ahead to a late summer post-pandemic economic boom. German March Consumer Price Index at 2.0% y/y in was not a factor.
There are plenty of U.S. economic reports in addition to Retail Sales. They include Philadelphia Fed Manufacturing Survey, Industrial Production, Capacity Utilization, Business Investment, and NAHB Housing Market Index.
The Canadian Manufacturing Sales report is also due.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians



MENAFN15042021000212011056ID1101923156


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.