USD/CAD down 0.18%, trading at 1.3524, as increased risk appetite and falling US Treasury yields boost the Canadian Dollar.
US PMIs indicate economic slowdown, fueling speculation that the Federal Reserve may pause its tightening cycle.
Canadian Retail Sales edge up by 0.1% MoM, beating estimates; USD/CAD likely to be influenced by upcoming US data.
The Canadian Dollar (CAD) recovered some ground against the American Dollar (USD), as seen by the USD/CAD pair, finishing Wednesday’s session with losses of 0.18%. The main drivers that bolstered the CAD were increased risk appetite and tumbling US Treasury bond yields. As the Asian session begins, the USD/CAD exchanges hands at 1.3524 and continues to record losses by a minimal 0.01%.
US equities rose on NVIDIA earnings; mixed Canadian retail sales failed to stall the CAD’s ascent
Wall Street finished the session with solid gains amid the hype for NVIDIA reporting earnings, which were outstanding, keeping investors’ appetite for risk high. S&P Global revealed US PMIs, which showcased an economic deceleration, seen by traders as a sign the US Federal Reserve would decide to pause or end its tightening cycle.
Worth noting that Services and Composite PMIs stood at expansionary territory but at the brisk of falling below the 50-line, seen as the expansion/contraction level. On the contrary, the Manufacturing PMI fell further into contractionary territory; compared to July 49.0, it was 47.0.
Further data witnessed US New Home Sales rose by 4.4%, from a -2.8% plunge in June.
Across the border, Canadian Retail Sales edged up as car sales climbed. Retail Sales rose by 0.1% MoM, exceeding estimates of 0%, while excluding autos plummeted to -0.8% MoM, below forecasts of a 0.3% increase. Even though it was a mixed report, the USD/CAD did not blink, as the downtrend continued during Wednesday’s North American session.
Given an absent economic calendar in Canada, the USD/CAD would be subject to US Dollar dynamics amid a busy calendar. On Thursday, the US docket would reveal Durable Goods Orders and Initial Jobless Claims for the week ending August 19. All that ahead of the awaited Federal Reserve Chair Jerome Powell’s speech at Jackson Hole on August 25
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