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The USD/CAD Rises Above The 1.3540 Level As Investors Await Canadian Retail Sales And US PMI Data
USD/CAD acquires momentum near 1.3544 as the Canadian Dollar weakens. July US Existing Home Sales were marginally below expectations. A fall in crude prices exerts pressure on the Canadian dollar. Traders will closely monitor the Canadian Retail Sales and US PMI reports.
During early Wednesday Asian trading hours, the USD/CAD pair advances above the 1.3500 threshold. The major currency pair is presently trading at 1.3544, down 0.05% on the day. Market participants await the June Canadian Retail Sales report. It is anticipated that the monthly figure will remain identical from the previous month.
Tuesday's economic data showed that US Existing Home Sales in July were marginally lower than anticipated, coming in at 4.07 million compared to 4.15 million anticipated and 4.16 million in the previous month. In July, the US Existing Home Sales Change decreased 2.2%, compared to a decline of 3.3% in June. In accordance with market expectations, the Richmond Fed Manufacturing Index for August decreased from -9 to -7.
Thomas Barkin, president of the Federal Reserve Bank of Richmond, stated on Tuesday that monetary policy would need to be tightened if inflation remained elevated and there were no signs that demand would decline. The US Dollar (USD) appreciates as a result of optimistic US data and hawkish remarks from a government official. However, Fed Chairman Jerome Powell's Friday speech will serve as a guide for investors and may shed light on the state of the economy.
As Canada is the largest exporter of crude oil to the United States, a decline in oil prices diminishes the Canadian Dollar. The markets expect the Bank of Canada (BoC) to maintain its interest rate policies for an extended period of time. The Bank of Canada (BoC) raised its interest rate by 25 basis points (bps) to 5% at its July meeting.
Wednesday will see the release of the Canadian Retail Sales for June and the US S&P Global PMI. On Thursday, all eyes will be on the annual Jackson Hole symposium, and on Friday, Fed Chair Powell will deliver a speech. Using this information as a guide, market participants will identify trading opportunities in the USD/CAD pair.
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