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The Loonie gets hit by mixed economic data and weaker crude.

Isaac Figueroa

The Canadian dollar is heading lower this morning, erasing yesterday’s gains after crude made new lows, testing US$ 50.60 a barrel, which is a new 13-month low. At the same time, the US dollar index is rising 0.37 percent this morning.

Market participants are increasingly concerned that major oil producers have few good options to tackle an expected surge in U.S. output.

The Canadian economic data was mixed this morning. Retail sales (monthly) showed a better number than expected at 0.3 percent vs. a 0.1 percent read. At the same time, core retail sales (monthly) came in at 0.1 percent versus 0.3 percent.

The Fed is still expected to raise its rate in December, but there are concerns over how many increases the central bank can implement over the coming months. However, for now, the US dollar index is acting as a haven, increasing by 0.37 percent this morning amid fresh trade tensions with China, and US futures pointing to loses during the shortened post-holiday session.

Looking into the next week, market participants are still focused on the Fed speeches, the US dollar’s response, and what the looming China-U.S. trade discussions could indicate for the US economy. Stock volatility, with significant averages pushed into negative territory for the year earlier this week, is sending mixed signals for the US dollar and gold.

The single currency took a hit on Friday and erased all of Thursday’s gains, as the EUR/USD pair fell by more than 50 pips overnight and it is trading near 1.1341 at this moment.

The Eurozone’s PMI for November came out very weak, and the services sector slowed notably to 53.1 from 53.7 in October, while the manufacturing survey dropped to 51.5 from 52.0 previously. The composite PMI decelerated to 52.4 from 53.4 in October. The manufacturing sector is now getting close to the critical 50.0 level, which divides recession and expansion in the industry.

The Pound erodes more than 60 pips against the US dollar promptly overnight, upon the latest comments by the former UK Brexit Secretary Raab citing that the British parliament will vote the UK PM Theresa May’s Brexit deal. This triggered a fresh selling-wave around the Pound, dragging the Pound sharply lower from near the 1.2885 area. It is trading at 1.2820 at this moment.

Furthermore, market participants took the current news on the Gibraltar-Spanish agreement with reservations that cue the sellers to take actions. All eyes are set on the EU’s Brexit Summit scheduled this Sunday.

With very little in the way of Australian economic data, the Australian dollar has been struggling the last two days, and it is falling this morning by around 30 pips. Liquidity was also thin with the US celebrating their annual Thanksgiving holiday, as well as it being a Japanese public holiday today.

Like the AUD/USD pair, NZD/USD is falling this morning by no less than 40 pips, erasing one-third of the gains seen in November. Kiwi traders were continuing to take their cue from developments in global risk sentiment and global equity prices; many will have a close eye on political uncertainty in the UK as well as the dynamic US-China trade war situation.