CAD retains solid gains on USD, hovering in 1.32 zone
Daily Currency Update
The Canadian dollar has opened the week on a strong note against the US dollar. At the time of writing, the CAD is trading at 1.32043, marking its strongest position in 9 months. Weakness in the DXY coincided with the Bank of Canada’s hawkish interest rate hike of 0.25% last week.In other news, the Industrial Product Price Index (IPPI) reported -1.0%, compared to market expectations of -0.3%. This indicates that the change in the price of domestically produced goods sold by manufacturers dropped more than expected in May.
Further, the Raw Materials Price Index (RMPI) witnessed a substantial decline on crude oil, dropping -18.4% year over year and -4.9% on a monthly basis. Notably, the prices for crude energy products dropped -9.3% largely due to conventional crude oil (-9.4%) and synthetic crude oil (-9.7%).
Key Movers
In observance of the U.S. Juneteenth holiday, the U.S. markets remain closed today. In further news, U.S. NAHB Housing Market Index was released at 55, surpassing the forecasted value of 51 and the previous value of 50. The positive shift in builder confidence can be attributed to solid demand, lack of existing inventory, and improving supply chain efficiency. Notably, this marks the first time that sentiment levels have surpassed the midpoint of 50 in 11 months.Looking ahead, eyes will be on the release of the UK CPI data on Wednesday. Currently, the market median for headline inflation is 8.5%, over four times the Bank of England’s inflation target of 2%, which should keep the pressure on for further rate hikes.
Meanwhile, the GBP nears a 14-month peak as the market digests a slew of monetary policy decisions by central banks in the last week.
Oil is up today in light holiday trade, selling at 71.71 at the time of writing from yesterday’s close of 71.69.
Expected Ranges
- EUR/CAD: 1.44018 - 1.44680 ▼
- GBP/CAD: 1.68891 - 1.69525 ▼
- AUD/CAD: 0.90253 - 0.90796 ▼
- USD/CAD: 1.31791 - 1.32288 ▼