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USD/CAD – Canadian dollar jumps after sharp retail sales reports

The Canadian dollar is almost unchanged in the Monday session, after strong gains on Friday. Currently, USD/CAD is trading at 1.3139, down 0.02% on the day. On the release front, it’s a quiet start to the week. Canadian Wholesale Sales jumped 1.2%, crushing the estimate of 0.6%. This marked the strongest gain since October. In the U.S, the sole indicator is Existing Home Sales, which is expected to rise to 5.46 million.

Canadian retail sales indicators for May sparkled on Friday, boosting the Canadian dollar 1.0 percent. Core Retail Sales jumped 1.4%, after failing to post a gain for three straight months. This easily beat the forecast of 0.6%. Retail Sales rebounded 2.0%, above the forecast of 1.0%. This follows a decline of 1.2% in April. Consumer inflation remained pegged at 0.1%, matching the forecast.

The U.S. dollar was broadly lower on Friday, after U.S President Trump made comments critical of Federal Reserve monetary policy. U.S presidents traditionally do not comment on moves by the Fed, but that did not prevent Trump from tweeting on Thursday that “tightening now hurts all that we have done”. On the weekend, Treasury Secretary Steven Mnuchin engaged in damage control, saying at the G-20 meeting that Trump was not interfering with the Fed policy of gradually raising rates. However, investors weren’t buying Mnuchin’s apologetics, and the U.S dollar continued to lose ground in Monday’s Asian session. There was more for investors to fret over, as Trump also attacked the EU and China for manipulating their currencies and keeping interest rates lower. This has raised concerns that the current global trade war could be followed by a currency war.

  Dollar weaker at the start of the week as G-20 comments on trade wars [1]

  Trade and currency wars a market threat [2]

USD/CAD Fundamentals

Monday (July 23)

*All release times are DST

*Key events are in bold

USD/CAD for Monday, July 23, 2018

USD/CAD, July 23 at 7:55 DST

Open: 1.3141 High: 1.3156 Low: 1.3114 Close: 1.3138

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 1.2970 1.3067 1.3160 1.3292 1.3436

In the Asian session, USD/CAD ticked lower but then gave up these gains. The pair has showed limited movement in European trade

Further levels in both directions:

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [6]

Currency Analyst at Market Pulse [7]
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.
Kenny Fisher

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