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The Canadian dollar strengthened versus its US counterpart, sending the Canadian dollar US dollar exchange rate lower on Tuesday. The pair closed the session close to the daily low of 1.3265. The pair is holding steady in early trade on Wednesday.
The US dollar traded broadly weaker versus its peers in the previous session following disappointing US consumer confidence figures. Official data showed that household sentiment unexpectedly decreased in November to 125.5. This was down from October’s reading of 126.1. It was also below analysts’ expectations of 127.
Whilst the figures were slightly disappointing, on a historical basis consumer confidence is still elevated. The data, from this perspective, supports the idea that the US consumer is holding up well despite the ongoing US – China trade dispute. This is particularly important because the US consumer is doing the heavy lifting in the economy amid the current manufacturing slowdown.
Whilst consumer confidence data fell short of analyst’s expectations, new home sales far exceeded, city analysts’ forecasts. Buyers brought new homes over the past two months at the fastest pace in 12 years thanks to lower prices and borrowing costs.
Today there is a slew of US data for investors to digest ahead of the Thanksgiving break on Thursday. The key data releases to watch include US GDP, inflation and durable goods. Broadly speaking analysts are expecting the releases to be an improvement on last month. In this scenario, stronger data could lift the dollar.
Trade will remain relevant; however, reactions are becoming more muted to the constant stream of headlines but little action.
Oil Lifts Canadian Dollar, Inventory Data In Focus
The Canadian dollar pick up in the US session on Tuesday as rising crude oil prices helped the commodity sensitive currency gather strength. Reports that OPEC will unanimously support an extension of the current oil production cuts ahead of next week’s OPEC meeting, lifted the price of oil. According to Russian media the oil group is discussing whether the extension should be for three months or six months. West Texas Intermediate ended Tuesday 0.45% higher.
Today there is no high impacting Canadian data. However, the oil sensitive Loonie will look towards oil inventory data due later today. Investors will be keen to see whether last months smaller than expected build of inventories is a sign of things to come.
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