USD/CAD Trades Bullish Over Disappointing Economic Data From Canada
On Wednesday, the weakness in the Canadian dollar against the US dollar continues on the back of weak economic data releases from Canada and rising uncertainties about Brexit and the phase one trade deal. At the time of writing, USD/CAD is trading at around 1.316.
On Monday, the Canadian dollar had soared to seven-week highs against the USD, but has weakened since then on the back of positive economic data releases from the US which have propelled the greenback to the highest level in a week. Moreover, weak economic data from Canada also weighed on the CAD, with factory sales declining by 0.7% MoM in October.
Later today, the Canadian inflation report is due to release, which could also impact the BOC’s decision on interest rates. Previously, the BOC had indicated that it will closely follow updates on the trade tensions, especially the US-China trade war, while deciding on its interest rates.
However, the Canadian dollar remained supported over strong crude oil prices following optimism in the markets about the US and China finalizing the phase one deal shortly as announced late last week. Over the past few days, WTI crude oil has managed to stay above the $60 level, supporting the CAD.
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