The Canadian dollar picked up some support against the US dollar as the markets are drifting into the end of the trading week. It seems like the week is closing on a slight risk-on undertone, with US equities modestly higher and safe-haven currencies under performing against other major currencies.
White House economic advisor Kudlow gave the risk sentiment a positive push after he said that trade negotiations were down to the “short strokes”, signaling — once again – a potential deal in sight.
The US dollar was slightly lower on mixed market reports. Core retail sales came in at 0.2% for October, while market forecasts were for a 0.3% rise. Nevertheless, retail sales (including automobiles) grew 0.3% in October, beating expectations of a 0.1% rise.
The Bank of Canada Governor Poloz gave some positive remarks at a Fed event yesterday, suggesting that current data shows a healthy labour market and wage growth above 4%.
These comments supported the Canadian dollar overnight, which reached an intraday high of 1.3220 against the US dollar during the Asian session. Market expectations of a rate cut in December were little changed at around 20%.
The pair’s technical picture is slightly bearish at the moment. The daily chart shows a bearish reversal pattern that could send the price further down, with the November 1 high of 1.3200 acting as a short-term support level.
To the upside, yesterday’s high of 1.3270 will likely provide some selling pressure and act as a resistance level if retested, followed by the October highs of 1.3345. As of 2:50 p.m. London time, the US dollar traded at 1.3230 against the Canadian dollar.