USD/CAD printed fresh 1-year low despite risk aversion and crude oil price
|The Canadian dollar is among the top performers on Friday. The loonie remains strong, unaffected by mixed data from Canada and neither by a decline in crude oil price.
CAD Unstoppable
USD/CAD broke below 1.2539 (Jul 20 low) and fell to 1.2520, hitting a fresh 1-year low. The pair moved closer to the 2016 low (1.2460).
At the moment, it trades at 1.2530/35, with the bearish bias (short and long term) intact. The pair is falling for the fourth day in a row the seventh time out of the last eight trading days. Since the beginning of the month dropped more than 400 pips. USD/CAD is about to post the lowest weekly close since June 2015.
Earlier today, CPI and retail sales data from Canada boosted the pair. The CPI index dropped 0.1% June and the annual rate stood at 1.0%. Retail sales rose 0.6% in May, above the 0.4% expected. The loonie received an impulse from the numbers. According to analysts from ING, the temporary inflation lull is no barrier for more rate hikes from the Bank of Canada.
Canada: Retail sales increased for third consecutive month, rising 0.6% to $48.9 billion in May
Canada: CPI rose 1.0% on a year-over-year basis in June, following a 1.3% gain in May
Canada: ‘Temporary’ inflation lull no barrier for the BoC - ING
The downside in the pair continues despite the fact that crude oil prices are falling on Friday. The WTI barrel is down 0.83%. Also, risk aversion is doing nothing to stop the slide of USD/CAD. The Dow Jones is falling 0.31% and the Nasdaq drops 0.21%.
The bearish momentum continues to be elevated, offsetting oversold conditions of some technical indicators. The pair is about on its way to the fourth weekly decline in a row.
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