USDCAD Analysis: Weak statistics and oil quotes correction may weaken the Canadian dollar

By IFCMarkets.com

Weak statistics and oil quotes correction may weaken the Canadian dollar

The upward movement means the weakening of the Canadian dollar. At the end of last week data on retail sales and ADP’s negative data on the labor market were released in Canada. The number of jobs in August fell for the 6th month in a row (-205.4 thousand). Retail sales in Canada increased by 0.6% in July. This is much less than the 22.7% growth in June. No significant Canadian macroeconomic data is expected this week. However, the emerging correction in world oil prices may support the sliding of the Canadian dollar. Oil is getting cheaper in anticipation of increased production in Libya, as well as amid the increase in the number of new coronavirus cases worldwide. This may strengthen quarantine measures in some countries and weaken global demand. The U.S. Energy Information Administration notes a 13% decline in current US oil demand compared to 2019, a nd a 20% decrease in motor fuel demand. The International Energy Agency (IEA) projects a drop in the total global oil consumption in 2020 to 91.7 million barrels per day from 100.1 million in 2019. At the same time, according to the IEA, the recovery of global demand to last year’s level may occur no earlier than 2023.

Summary of technical analysis

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