USD/CAD holds below the 1.3700 mark, US Retail Sales, PPI data looms
- USD/CAD gains ground around 1.3688 on the softer USD.
- October's US Consumer Price Index (CPI) grew 3.2% YoY vs. 3.7% prior.
- The rebound in oil prices might lift the Canadian Dollar (CAD).
- All eyes are on the US Retail Sales and Producer Price Index (PPI) on Wednesday.
The USD/CAD pair attracts some sellers during the Asian session on Wednesday. The weaker US dollar, backed by a significant drop in US Treasury bond yields, weighs on the USD/CAD pair. At press time, the pair is trading near 1.3688, losing 0.03% for the day.
October’s US inflation surprised to the downside, with the Consumer Price Index (CPI) growing 3.2% YoY compared to the previous reading of 3.7%, worse than the market consensus of 3.3%. Meanwhile, the monthly and annual Core CPI, which excludes volatile food and energy prices, rose by 0.2% and 4.0%, respectively. As underlying price pressures continue to moderate, the markets anticipate that the Federal Reserve (Fed) will not raise interest rates further in its December meeting.
On the Loonie front, the rebound in oil prices might lift the commodity-linked Loonie, as the country is the leading oil exporter to the US. In the absence of economic data released from the Canadian docket on Wednesday, the USD/CAD pair remains at the mercy of USD price dynamics.
Looking ahead, market players will monitor the US Retail Sales and Producer Price Index (PPI) on Wednesday. The monthly Retail Sales for October is estimated to drop by 0.3% from the 0.7% rise in September. The annual PPI figure is expected to rise 1.9% in October, while the PPI ex Food & Energy is forecast to climb 2.7% YoY. These figures could give a clear direction to the USD/CAD pair.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
