The Loonie loses following a strong Greenback, and despite a robust equity market
Tuesday 23 July, 2019
Daily Currency UpdateCAD - Canadian DollarThe Loonie weakened after wholesale trade sales fell short of expectations for a +0.5 percent increase, decreasing by - 1.8 percent in May to $ 63.8 billion. This follows weak retail sales from Friday. According to Statistics Canada, this data follows five consecutive monthly increases. Lower sales were observed in six sub-sectors, accounting for 86 percent of total wholesale sales. The motor vehicle and motor vehicle parts and accessories sub-sector was the leading contributor to the decrease in May, followed by the miscellaneous sub-sector. In volume terms, wholesale sales decreased 1.9 percent from April to May. It seems like a lot of good news is already priced in for Canada. Technically speaking, the USD/CAD is trading at 1.3159. It seems pressured to the upside after breaking out from an important resistance at around 1.3150. If the short-term trend continues, the next resistance levels are 1.3190 and 1.3219. On the downside though, 1.3098 and 1.3069 are two crucial support levels. The Loonie is not influenced by crude oil this morning, because it is trading flat, easing some gains. Crude oil traders digested conciliatory remarks by British authorities after Iran's seizure of its oil tanker on Friday.
Key MoversThe bad news came from the IMF, which further decreased its global growth outlook, and suggested that policy "missteps" on trade and Brexit could hinder a rebound. The world economy will expand 3.2 percent this year and 3.5 percent next year, both down 0.1 percentage point from April projections. These new numbers are already the lowest since the financial crisis. In the U.K., frontrunner Boris Johnson has defeated rival Jeremy Hunt and is replacing Theresa May as both Conservative party leader and Britain's Prime Minister. In his victory speech, Johnson said he would prove his critics wrong and deliver Brexit. May will step down as Prime Minister on Wednesday. The focus for Johnson will be to take Britain out of the E.U., but his hardline strategy has plenty of critics. He also said he would work to, "…deliver Brexit, unite the country and defeat Jeremy Corbyn."
- USD/CAD: 1.3100 - 1.3190 ▲
- EUR/CAD: 1.4622 - 1.4709 ▼
- GBP/CAD: 1.6309 - 1.6410 ▲
- AUD/CAD: 0.9177 - 0.9240 ▼
- NZD/CAD: 0.8800 - 0.8873 ▼