Following the poor retail sales report from the US, the greenback is falling and the Canadian dollar is certainly taking advantage of this.
USD/CAD dropped to a new low of 1.1934, below the previous cycle low that was inspired by poor US data as well as strengthening oil prices. We will soon get oil related data.
The US consumer did not increase spending in April, the first month of the first quarter. While this was partially compensated with an upwards revision for the data for March, the market cares much more about current figures.
In addition, the consensus was for a resumption of solid growth in Q2 after a poor first quarter. Blaming the weather is no longer an option.
Canada has enjoyed rising oil pries. Cure inventories are released later today and could give another boost to the price of the black gold, Canada’s most important export.
More: CAD: Rotation Emerges – CIBC
Here is the USD/CAD chart showing the clear breakdown:
