USD/CAD extends downside below 1.3750 on weaker Retail Sales

Source Fxstreet
  • 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,”

USD/CAD

Overview
Today last price 1.3716
Today Daily Change -0.0008
Today Daily Change % -0.06
Today daily open 1.3724
 
Trends
Daily SMA20 1.3696
Daily SMA50 1.3694
Daily SMA100 1.3607
Daily SMA200 1.3582
 
Levels
Previous Daily High 1.3764
Previous Daily Low 1.3721
Previous Weekly High 1.3792
Previous Weekly Low 1.368
Previous Monthly High 1.3783
Previous Monthly Low 1.359
Daily Fibonacci 38.2% 1.3738
Daily Fibonacci 61.8% 1.3748
Daily Pivot Point S1 1.3708
Daily Pivot Point S2 1.3693
Daily Pivot Point S3 1.3665
Daily Pivot Point R1 1.3752
Daily Pivot Point R2 1.378
Daily Pivot Point R3 1.3795

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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