Home Daily Commentaries Demand for USD down for third straight day

Demand for USD down for third straight day

Daily Currency Update

Demand for the stronger US dollar was down for a third straight day on Tuesday as data showed that US retail sales increased in April, signaling that consumer spending remained robust despite prices rising at the fastest pace in decades.

US retail sales rose 0.9% in April from the previous month, a little below an expected rise of 1%. Core retail sales, which excludes autos, gasoline, food services and building materials, were up 0.6% vs. an estimated 0.3% increase. The data suggests that US consumers are still spending on merchandise amid rising inflation. Consumer spending is a big contributor to the US economy, so analysts will be watching this economic indicator as the Federal Reserve plans to tighten monetary policy in the coming months.

USDCAD was sitting at 1.2839 at the time of writing.

Key Movers

The pound strengthened against the US dollar on Tuesday, climbing to around 12-day highs as market participants digested the release of upbeat jobs data. The UK employment rate fell to 3.7% in the first three months of 2022, its lowest level since 1974. GBPUSD was up 1.27% sitting at 1.2472 at the time of writing.

The euro also strengthened against USD, shrugging off stronger than expected US retail sales data for April as investors awaited comments from European Central Bank President Christine Lagarde. The conflict in Ukraine and the threat of a natural gas standoff between Russia and Europe remain a focus as they threaten to derail economic recovery in the region. EURUSD was up 0.98% trading at 1.0537 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.3394 - 1.3541 ▲
  • GBP/CAD: 1.5799 - 1.6026 ▲
  • AUD/CAD: 0.8935 - 0.9024 ▲
  • USD/CAD: 1.281 - 1.2913 ▼