CAD on course for further gains
Daily Currency Update
USD/CAD is down slightly at -0.18% to 1.31550. The CAD appears to remain on course for further gains as the Bank of Canada (BoC) is expected to hike rates again in July. Preliminary manufacturing monthly sales data is up 0.8% from the previous 0.3% bump. This increase in sales values shows a bit of a bullish outlook for the Loonie. Another data release, the monthly Wholesale Trades report also showed an uptick of 3.5% from the previous -1.4%. This higher reading indicates an increase in consumer spending in June. Inflation and GDP data being released this week could provide further support for the expected July rate hike, considering persistent price pressures seen in other economies, most notably in the UK. In oil news, crude prices hover near $70, selling at $69.33 at the time of writing. West Texas Intermediate (WTI) oil has finished the last 8 weeks with just a $3.51 spread as the Organisation of the Petroleum Exporting Countries (OPEC) production cuts offset weak demand in North America and Europe.Key Movers
The US dollar index (DXY) is down today in the 102.678 range. The DXY has dipped after its peak performance last week and is trading sideways today. The Dallas Federal Reserve manufacturing index, which reports the performance of the manufacturing sector in Texas, came in at -23.2 for June. This is an improvement over the previous contraction of -29.1 in May and the expectations of -26.5. The market’s focus for this week will be on Federal Reserve Chair Jerome Powell’s speeches on Wednesday and Thursday as well as on the US Gross Domestic Product data release for the first quarter of the year.The German IFO Institute confidence index plunged in June, dropping for the second month in a row to 88.5 from the previous 91.5 and below the forecasted 90.7. This outcome suggests that the German economy won’t likely see a rebound soon.
In news out of the United Kingdom, the Confederation of British Industry released the realized sales numbers at -9, indicating lower sales volumes for June after a report of -10 in May.
Mexico’s economic activity year-over-year continues to grow by 2.5%, stronger than the expected 2.3%, showing continued persistence through higher interest rates.
Expected Ranges
- EUR/CAD: 1.43254 - 1.43719 ▲
- GBP/CAD: 1.66971 - 1.67824 ▼
- AUD/CAD: 0.87735 - 0.88054 ▼
- USD/CAD: 1.31569 - 1.31807 ▼