The Canadian dollar is down slightly on Thursday. Currently, USD/CAD is trading at 1.3205, down 0.11% on the day.
Federal Reserve minutes boost US dollar
The Fed minutes were downbeat about economic conditions. Members stated concern about Covid-19’s continuing adverse impact on the US economy. As well, members dampened any expectations about using bond purchases to control yields on government bonds. This resulted in yields dipping lower while the dollar showed gains after the minutes were released. The minutes also reiterated a call from Fed Chair Jerome Powell on the need for a stimulus fiscal package to boost the struggling economy. A fiscal package remains stalled in Congress, however, and it’s unclear when there will be a vote in Congress.
On Friday, Canada releases retail sales, the primary gauge of consumer spending. Analysts are expecting a breakout in June. Retail sales are projected to jump 24.7%, while core retail sales are expected to climb 14.5%. If these releases are within expectations, the Canadian dollar could respond with gains.
USD/CAD has been grinding sideways on Thursday, as the pair hugs the 1.32 line
- 1.3256 is the next resistance line. This is followed by resistance at 1.3288
- 1.3162 is providing support, followed by support at the round number of 1.3100
- The 10-day MA remains relevant and is situated slightly above the pair