The Loonie quietly outperforms following strong fundamentals
Wednesday 22 May, 2019
Daily Currency UpdateCAD - Canadian DollarWhile the trade-war headlines continue to rumble, the USD/CAD pair touched an intraday low (stronger Loonie) and a new low for the last month: 1.3358, which represents a fall of 0.34 percent day to day. The latest catalyst this morning was retail sales data, which increased for the second consecutive month, rising 1.1 percent to $ 51.3 billion in March. Sales were higher in 7 of 11 subsectors, representing 39 percent of retail trade. The core retail sales number came in at 1.7 percent, above the forecast of 0.8 percent, and higher than the previous number of 0.7 percent. The most important drivers later today will be the FOMC meeting minutes at 2:00 pm EST and the US crude oil inventories at 10:30 am EST. Technically speaking, the USD/CAD pair might fall to 1.3325, a key support given that it is part of an uptrend that comes from February 2018, which was tested in February 2019. However, it has a strong resistance at around 1.3411 and given the "risk off" environment of today, it might be possible that it is tested.
Key MoversTheresa May made her final big bet as Prime Minister yesterday, offering the Labour party a "new deal" that included the possibility of a second EU referendum in what she claimed was "the last chance" to deliver Brexit. The British Pound did rally initially on hopes that May's deal will be compelling enough to change the opinion of lawmakers. However, the rally fades quickly, and the Pound continues making new lows. The reality is that her plan to build a cross-party consensus was declared dead on arrival by furious Conservative Eurosceptics; Labour leader Jeremy Corbyn called it "a repackaging of the same old bad deal."
- USD/CAD: 1.3325 - 1.3415 ▼
- EUR/CAD: 1.4902 - 1.4965 ▼
- GBP/CAD: 1.6919 - 1.7019 ▼
- AUD/CAD: 0.9179 - 0.9230 ▼
- NZD/CAD: 0.8686 - 0.8758 ▼