CAD struggles amid mixed retail and spending data
Daily Currency Update
The USD/CAD pair floated towards the 1.3600 level as Statistics Canada reported mixed retail and spending data for June. Overall Retail Sales increased by 0.1%, in line with May’s reading, while investors and traders anticipated a stagnant performance. On the flipside, consumer spending for goods and services other than automobiles contracted at a higher pace of 0.8% versus the 0.3% contraction in May. This was significantly less than investor expectations of a 0.3% expansion. This dip in consumer spending would allow the Bank of Canada (BoC) to keep interest rates steady. Oil prices sank -2.3% at the opening of today’s session. Overnight numbers from the American Petroleum Institute came in below estimates and slashed oil prices.Key Movers
The US dollar index held its ground in the early session, currently at the 103.47 level. Federal Reserve officials are maintaining silence on future rate cuts as the BRICS meeting on de-dollarization starts its second day. The BRICS meeting between Brazil, Russia, India, China, and South Africa discusses setting up a payment system between the entities as an alternative to using the USD. A few major countries have spoken out in favour of keeping the USD as a trade currency. Some geopolitical tensions seem to be leading to USD strength today. Market eyes will be on the Purchasing Manager’s Index (PMI) data set to be released today.The GBP/USD pair dipped below the 1.27 range amid disappointing UK PMI numbers. The UK Preliminary Services Business Activity Index hit a 7-month low of 48.7 in August, compared with a 51.5 final print for July and the 50.8 level anticipated by markets. The disappointing UK Manufacturing and Services PMI data suggests that the Bank of England (BoE) could be nearing the end of its tightening cycle, which is hurting the pound.
The AUD/USD pair fell back near the 0.6460 level in the early New York session. The Aussie dollar came under pressure as the DXY looks towards a stronger session.
Expected Ranges
- EUR/CAD: 1.3535 - 1.3599 ▲
- GBP/CAD: 1.7128 - 1.7285 ▲
- AUD/CAD: 0.8701 - 0.877 ▲
- USD/CAD: 1.3535 - 1.3599 ▲