USD/CAD falls to new daily low as oil prices rise slightly
Thursday 19 January, 2023
Daily Currency UpdateThe slight increase in crude oil prices is supporting the Canadian Dollar and is acting as a headwind for the pair. WTI is trading around 80.00. Month over month wholesale trade numbers for November came in at 0.5% vs the forecasted 1.9%. The motor vehicle and automotive parts and accessories subsector as well as the machinery equipment and supplies subsector saw increased sales while other sectors experienced a decline. USD/CAD has retreated from its one-week high and is trading around 1.34750.
Key MoversThe US Department of Labor published data on Thursday showing the lowest levels of jobless claims since September 2022 with 190,000 initial claims filed in the week ending on January 13. The published data reported better numbers than the anticipated 214,000 claims and followed a downward trend in jobless claims from last week's figure of 205,000. Monthly data published by the US Census Bureau showed that Housing Starts declined by 1.4% from December 2022 to present, following the 1.8% drop in November of 2022. The DXY (Dollar Index) appears firm around the 102.100 area. The euro has been gaining significant support in the eurozone due to lower energy costs, stickier inflation readings, and a hawkish central bank that has been aggressive in its stance on interest rate hikes. Favor for the central bank shows a predicted hike of 50 bps in the next meeting. European Central Bank (ECB) President, Christine Lagarde spoke today at a panel discussion titled "Finding Europe's New Growth" at the World Economic Forum (WEF) in Davos. Lagarde confirmed the bank's hawkish stance on interest rates by stating: "Inflation is way too high and will stay course with rate hikes." EUR/USD is currently trading around the 1.08200 area. UK inflation decreased slightly by the end of December 2022 to 10.5%, down from 10.7% recorded in November 2022. Investors are anticipating that the UK central bank will continue to increase interest rates to attempt to tackle high inflation. Prediction revisions showed upward adjustments after stronger wage growth data was published on Tuesday, which could maintain inflation at high levels. GBP/USD is having difficulty gaining any significant momentum and Thursday's trading has been between the 1.23300 and 1.23500 levels.
- EUR/CAD: 1.4632 - 1.4515 ▼
- GBP/CAD: 1.6682 - 1.6587 ▼
- AUD/CAD: 0.9284 - 0.9419 ▲
- USD/CAD: 1.3517 - 1.3386 ▼