USD/CAD climbs as oil pulls Loonie down

Key Movers

The US dollar is largely flat today after rising more than 2% since the beginning of May. This stand still comes after US President Joe Biden and House Speaker Kevin McCarthy reached an agreement to suspend the US debt ceiling until January 1, 2025. This has not yet been voted into law. Until this agreement passes there is still a risk that the US will default on their obligations which could be disastrous to the greenback. Markets seem to be viewing the agreement as a positive step to avoiding default as of now and continue to move forward cautiously.

The Eurozone Consumer Confidence readings for May came in at -17.4, in line with expectations. This is a further drop from previous months, indicating that Eurozone residents are not confident in the European economy. While confidence is low, Spanish Consumer Price Index (CPI) data saw a positive release. The CPI data out of Spain came in at 3.2% year-over-year versus the expected 3.5%. This reading is very positive for the Eurozone economy as this is evidence of inflation cooling down and the support of more dovish movements out of the European Central Bank.

In other good news, Switzerland’s first quarter GDP numbers come in higher than expected at 0.3%, rising above both expectations and last month’s growth. This indicates that the Swiss economy is recovering and performing well despite higher interest rates.