Loonie stronger

It was also a tough day for the Canadian and Australian dollars. The loonie was trading well at the start of the NY session but turned sharply lower after the weekly oil inventory report. According to the U.S. Energy Information Association, crude supplies fell for the second week in a row by 2.5 million barrels. While a number of analysts anticipated a decline, the fall was larger than anticipated causing oil prices to hit a 10-month low. USD/CAD shot higher in response and we are now looking for a move to low. Further gains beyond that would be difficult with the Bank of Canada’s recent hawkishness. Looking ahead tomorrow is a big day for CAD with retail sales scheduled for release. The sharp rise in employment followed by the larger than anticipated increase in wholesale sales points to stronger consumption. So selling USD/CAD with a stop above 1.34 could be a worthwhile trade.
CAD
Core Retail Sales m/m
1.5% 0.6% -0.1%
@kathylien