The loonie is opening slightly better this morning, around 1.2880, after having a very weak session on Friday that saw the CAD loosing as much as 0.5% versus its US counterpart. Canadian economic data was mixed on Friday with CPI inflation printing in line with market expectations. Headline Retail Sales, released at the same time, came in at 0.6% vs. expectations for 0.3% but with auto and parts stripped out of the number, it printed at -0.2% vs. 0.5%. Bets on a rate hike this month were severed on the news and USD/CAD gapped higher by +100 points.
Unfortunately for the CAD, NAFTA negotiations don’t seem to be going as expected while retail sales excluding autos came weaker than estimates. Also, yields didn’t support the CAD as Consumer Price Index Year-over-year also missed estimates.
It’s a public holiday in Canada today, so no data is due for release.
Levels to watch for the USDCAD this week are 1.29 and then 1.2950 on the upside while first support for the USD should come around 1.28.