- USD/CAD finds support near 1.3660 after slower-than-expected decline in US retail sales data.
- Lower demand for automobiles weighs on overall consumer spending.
- Oil prices face pressure near $80.00 amid easing tensions in the Middle East.
The pair USD/CAD finds intermediate support near 1.3660, as the US Census Bureau has reported that retail sales declined at a slower pace in October. Monthly retail sales contracted modestly by 0.15% versus expectations for a 0.3% decline. Consumer spending increased 0.7% in September.
Monthly retail sales ex-autos rose 0.1%, while investors expected stagnation. Economic data indicates that global domestic sales were weighed down by a sharp decline in demand for cars, as rising borrowing costs have hit households’ costs of living.
The overall US Producer Price Index (PPI) has suffered a sharp drop due to the sharp decline in gasoline prices. The annual headline PPI rose at a slower pace of 1.3%, versus estimates of 1.9% and the previous reading of 2.22%. In the same period, the core PPI slowed to 2.4% versus expectations and the previous release of 2.7%.
The Dollar Index (DXY) attempted to recover following the release of US retail sales data. Market participants dumped the dollar index sharply on Tuesday as the US inflation report for October came in softer than expected. Annual general inflation grew by 3.2%, the lowest rate in the last two years.
Core Inflation slowed to 4.0%, compared to expectations and the previous reading of 4.1%. The nominal slowdown in core inflation demonstrates rigidity, which continues to worry those responsible for the Federal Reserve (Fed), who last week leaned toward further tightening of monetary policy. Fed Chairman Jerome Powell also commented that current interest rates appear inadequate to control price pressures.
Looking ahead, investors will closely monitor the outcome of the meeting between US President Joe Biden and Chinese President Xi Jinping at the White House.
Meanwhile, oil price retreated after failing to extend its gains above the crucial $80 resistance as tensions in the Middle East have begun to ease. It should be noted that Canada is the main oil exporter of the United States and the drop in oil prices has an impact on the Canadian dollar.
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.
