Daily Currency Update

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CAD keeps flying high

CAD - Canadian Dollar

Demand for the Canadian dollar remained high-flying against a broadly weaker USD, edging closer to a six-year-high which it hit earlier this week. USDCAD was at 1.206 at the time of writing.

Retail sales rose 3.6% in March from February, above expectations of 2.3%, according to Statistics Canada. The data signals that parts of the economy are finally seeing a lift, as provinces consider various reopening plans.

Key Movers

Eurozone business growth accelerated at its fastest pace in over three years this month. The IHS Markit’s Composite Purchasing Managers’ Index rose to 56.9 points from April’s 53.8. The survey is usually seen as a good measure of economic health. EURUSD was down modestly 0.4% at 1.2177 this morning after remarks by European Central Bank president Christine Lagarde on inflation. Her comments, which are in line with the US Federal Reserve’s stance, indicates that the ECB believes inflation rise this year is temporary.

The pound has been trading sideways for a large part of the week, however saw a slight lift on the back of stronger than anticipated retail data, suggesting areas of the economy are recovering far quicker than predicted. PMI data released today showed private UK business activity saw a record high, climbing to 62 points in May from 60.7 in April. GBPUSD broke the 1.42 handle in early trading before retracing back towards the mid 1.41 range.

Demand for the US dollar hit a four-month low in early morning trading, erasing any gains made yesterday after the Fed’s meeting minutes hinted at the possibility of paring back stimulus. The US Dollar Index was slightly up 0.1% to 89.96 at the time of writing.

Expected Ranges

EUR/CAD: 1.467 - 1.477 ▼

GBP/CAD: 1.707 - 1.715 ▼

AUD/CAD: 0.933 - 0.938 ▼

USD/CAD: 1.202 - 1.209 ▲