News & Analysis

The Canadian dollar has just broken out of its post-Fed range, where the currency pair traded for 27 consecutive working days. The impetus behind such a move isn’t as clean cut as one would like, but comes from general dollar weakness over the last two days.

Gold is higher at 1840.00, rising another $10 in the last 20 minutes, while WTI has risen to test the $42 mark after sitting just shy of $41 this morning. Even the euro, which struggled to hold onto yesterday’s gains despite the recovery fund being rubber stamped overnight, is now back to sitting roughly flat on the day.

The current market pricing doesn’t necessarily suggest a risk-on nor risk-off move by the usual indicators, but instead a broad rout in the US dollar as the southern states remain embattled with the domestic outbreak while the rest of the world recovers.

The Canadian dollar extended its early morning gains despite retail sales data for May undershooting expectations by 1.3% with a reading of 18.7% MoM. In volume terms, retail sales rose by 17.8% with new car dealers the largest upside contributor, rising 9.97%. The supermarkets category, which saw a massive uptick during the virus outbreak due to stockpiling effects. Statistics Canada’s flash estimate for June saw retail sales rise by 24.5%. The consumption data will prove pivotal ahead of tomorrows CPI release as the statistics agency and Bank of Canada are paying much more attention to the shifting consumer tastes in an adjusted CPI basket. This is expected to show a truer measure of inflation for consumers.


USDCAD breaks recent range to downside amid USD weakness and recovering oil prices


USD dollar sells off broadly across both G10 and EM space today


DXY falls to post-pandemic low as southern states remain embattled with the domestic outbreak as the rest of the world recovers


Author: Simon Harvey, FX Market Analyst


This information has been prepared by Monex Canada Inc., an execution-only service provider. The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. No opinion given in the material constitutes a recommendation by Monex Canada Inc., or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication.