Oanda's Kenny Fisher talks US dollar against Canadian dollar - April 21st
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- Canadian retail sales expected to have declined
- US Services and Manufacturing PMIs projected to have slowed
- USD/CAD pushes above 1.35
The US dollar is broadly higher today, and USD/CAD has climbed to 1.3530, up 0.40% on the day. The Canadian dollar is on a downturn and has lost close to 200 points since last Friday.
Canadian dollar eyes retail sales, US PMIs
The week wraps up with key releases on both sides of the border. Canada releases retail sales for February, with the markets expecting declines after strong gains in the prior reading. Headline retail sales are expected to fall by 0.6%, after a sharp gain of 1.4%. The core rate is projected to dip by 0.1%, after a 0.9% gain in January.
A decline in consumer spending would not be all that surprising, given current economic conditions. Inflation, which is public enemy number one, appears to have peaked, but prices continue to rise and this is weighing on consumers. Households are seeing a decrease in disposable income as higher interest rates mean rising mortgage costs. The Conference Board of Canada has projected real GDP will expand by 0.9% in 2023, a negligible gain. Consumer spending is a key driver of economic growth and a sour consumer holding tightly on the purse strings will hamper the economic recovery.
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The US releases April PMIs later today and any surprises could affect the movement of USD/CAD before the weekend. The Services PMI is expected to dip to 51.5, down from 52.6, while the Manufacturing PMI is projected to tick lower to 49.0, down from 49.2 points. The 50.0 level separates expansion from contraction. Services is expected to show expansion for a third straight month, while manufacturing is forecast to remain in contraction for a seventh straight time. These trends are evident worldwide and are not limited to the US. The service sector (business activity) remains resilient in the face of an uncertain global outlook, while manufacturing continues to struggle with rising prices and supply chain issues.
USD/CAD Technical
- USD/CAD is testing resistance at 1.3509. Above, there is support at 1.3629
- 1.3406 and 1.3275 are providing support
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USD/CAD extends rally, markets brace for weak Canadian retail sales - MarketPulseMarketPulse
