The USD/CAD pair has surged to near 1.3740 as the US Dollar (USD) makes a strong comeback in Thursday’s New York session. This bullish movement comes after the release of upbeat United States (US) Retail Sales data for July and lower-than-expected Initial Jobless Claims for the week ending August 9.
The US Dollar Index (DXY), which measures the USD against six major currencies, has climbed above 103.00. The Retail Sales report revealed a robust 1% increase in sales at retail stores, surpassing the estimated 0.3%. This positive data indicates strong consumer demand, following a revised 0.2% decline in June.
US Dollar Performance Today
The table below shows the percentage change of the US Dollar (USD) against major currencies today. The USD demonstrated its strength against the Japanese Yen with a significant 1.21% increase.
| Currency | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | – | 0.44% | 0.03% | 1.21% | -0.01% | -0.20% | 0.28% | 0.80% |
Retail Sales are a key indicator of consumer spending, which can impact inflation levels. The strong performance in retail indicates healthy spending habits, reducing speculations of a 50-basis point interest-rate cut by the Federal Reserve (Fed) in September. However, expectations for the Fed to normalize its policy in the same month remain strong.
Additionally, Initial Jobless Claims came in lower at 227K compared to estimates of 235K, signaling a positive trend in the labor market.
On the CAD front, rising Oil prices continue to support the Canadian Dollar. The expectation of rate cuts by the Fed boosting fuel consumption has led to a strong recovery in Oil prices. Canada’s position as a leading Oil exporter to the US benefits from higher Oil prices, attracting significant foreign investments.
Canadian Dollar FAQs
Here are some frequently asked questions about the factors influencing the Canadian Dollar (CAD):
- Interest rates set by the Bank of Canada
- Oil prices and Canada’s export market
- Economic health indicators
- Inflation and trade balance
Understanding these factors can provide insights into the movement of the CAD in the forex market.