The Canadian Dollar’s Market Movement
- On Wednesday, the Canadian Dollar (CAD) lost ground against the Greenback, reversing a recent recovery attempt.
- Canada’s economic data will be quiet until Friday’s Retail Sales report.
- After two days of gains, the CAD fell back by 0.1% against the US Dollar.
The Canadian Dollar (CAD) retreated by 0.1% against the US Dollar on Wednesday, halting its recent recovery. The Loonie, as it is affectionately known, had been showing signs of strength against the safe-haven USD, but market conditions and economic data have kept it subdued.
Although Canada saw a brief uptick in Consumer Price Index (CPI) inflation figures, the CAD remains near multi-year lows following a recent surge in USD/CAD to a 54-month high above 1.4100. Thursday’s data calendar is light, with the focus shifting to Friday’s Purchasing Managers Index (PMI) releases for the US and Canadian Retail Sales data for September.
Key Market Movers for the Canadian Dollar
- The CAD slipped by 0.1% against the Greenback, keeping USD/CAD near multi-year highs.
- Although CPI figures provided a brief boost, bullish momentum faded quickly.
- Thursday’s data is limited, with US jobless claims being the main highlight.
- Friday will see attention on Canadian Retail Sales and US PMI releases.
US Jobless Claims and Canadian Retail Sales
Thursday’s focus will be on US weekly Initial Jobless Claims, expected to show a slight increase. This data will set the stage for Friday’s key releases, including Canadian Retail Sales for September. The headline figure is projected to remain steady, with core Retail Sales excluding automotive purchases expected to rebound.
US PMIs and CAD Price Forecast
Friday’s spotlight will be on US PMI figures, with Manufacturing and Services components expected to show slight improvements. Despite recent gains, the CAD remains under pressure against the Greenback. With USD/CAD near a 54-month high, bearish momentum may limit significant gains for the Loonie.
Understanding the Canadian Dollar’s Value
The value of the Canadian Dollar is influenced by various factors, including:
- Interest rates set by the Bank of Canada
- Oil prices, as Canada’s largest export
- Economic health indicators
- Inflation rates
- Trade balance between exports and imports
Market sentiment, the US economy’s health, and global economic conditions also play a role in determining the CAD’s value.