USD/CAD rises to near 1.3480 on lower Crude prices, US Dollar improves before PPI data
|- USD/CAD gains ground as the US Dollar appreciates on risk aversion.
- US PPI data and the Consumer Sentiment Index are set to be released on Friday.
- US Retail Sales decreased 0.8% MoM in January against the expected decline of 0.1%.
- Lower WTI price contributes downward pressure for the Canadian Dollar.
USD/CAD snaps a two-day losing streak, improving to near 1.3480 during the Asian hours on Friday. The US Dollar (USD) receives upward support against the Canadian Dollar (CAD), which could be attributed to the risk aversion sentiment while the market prices in the possibility of no rate adjustment by the Federal Reserve (Fed) in the upcoming meetings in March and May.
However, the USD/CAD pair extended losses after the release of disappointing US Retail Sales data on Thursday. US Retail Sales (MoM) decreased 0.8% in January against the market expectation of 0.1% decline and the previous 0.4% increase. Meanwhile, Retail Sales Control Group declined by 0.4% in January, swinging from the previous increase of 0.6%.
However, the Greenback might have received some helping hand from US Initial Jobless Claims, which reported 212,000 unemployment claims for the week ending on February 9, lower than the expected 220,000.
The decline in Crude oil prices weakens the Canadian Dollar, given that Canada is the biggest oil exporter to the largest Crude oil consumer United States (US). West Texas Intermediate (WTI) oil price declined following a larger-than-anticipated increase in US Crude Oil Stockpiles, which raised concerns about the demand outlook in the United States.
In the absence of high-impact data from Canada during the week, the market witnessed that seasonally adjusted Housing Starts (YoY) settled at 223.6K in January, against the expected 235K and 248.9K prior. Moreover, Manufacturing Sales declined by 0.7% month-over-month in December, swinging from the previous increase of 1.5%.
Friday will see investment and Wholesale Sales data from Statistics Canada. On the United States docket, Producer Price Index (PPI) data and the Michigan Consumer Sentiment Index will be eyed.
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