- The USD/CAD pair refreshes its daily low as rising oil prices strengthen the Canadian Dollar.
- Canada’s retail sales report indicates that auto demand remained weak.
- The US dollar weakened due to the Fed’s Powell’s neutral guidance.
The pair USD/CAD is facing selling pressure after a softer pullback near the round resistance level of 1.3700 early in the American session. USD/CAD is expected to fall back below 1.3680 as the Canadian Dollar has strengthened due to bullish oil prices.
Oil demand improves due to escalating tensions in the Middle East, which would reduce oil supply amid oil supply chain disruption. Additionally, the United States Department of Energy (DOE) has announced the replenishment of the Strategic Petroleum Reserve (SPR). The US government has been extracting oil from the SPR since the start of the war between Russia and Ukraine.
It should be noted that Canada is the main exporter of oil to the United States and the increase in oil prices strengthened the Canadian dollar.
Meanwhile, Statistics Canada has reported better-than-expected retail sales data for August. Monthly retail sales contracted at a slower pace of 0.1%, while economists had forecast a decline of 0.3%. In July, Retail Sales grew 0.4%. Retail sales, excluding automobiles, grew 0.1%, compared to expectations of stagnation.
The retail sales report indicates that demand for cars remains weak as households face the burden of higher borrowing costs.
The US dollar weakened following Federal Reserve (Fed) Chairman Jerome Powell’s neutral statement on interest rates. The Fed’s Powell conveyed that rising US Treasury yields have significantly tightened overall financial conditions.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
