After hitting a two-year low, the USD/CAD pair ended the day yesterday with a major reversal, closing up 0.76%. We can pinpoint certain factors that contributed to the relative strength of the greenback:
- U.S. Durable Goods Orders were a pleasant surprise, with 6.5% growth in June, well above the forecast +3.9%.
- U.S. wholesale and retail inventories increased by 0.6% instead of an expected +0.3% in June, signalling that the country’s economy remains on the right track.
- Bloomberg has been informed by anonymous sources that certain members of the Trudeau government are alleged to be unhappy with the strategy adopted by the Bank of Canada (BoC). According to the officials in question, the key rate was raised too soon and subsequent hikes could endanger Canada’s economic future, particularly due to record household debt levels.
This morning, we’ll be keeping an eye on Canadian and U.S. GDP numbers and U.S. Personal Consumption at 8:30.
Yusuf Kocagozli