By TraderVox.com
Tradervox (Dublin) – Speculation of faster economic growth in Canada led the loonie to advance against most of its trader peers as euro tumbled over political turmoil in Netherlands and France. The Canadian dollar had fallen to the lowest against the US dollar as demand for safe assets boosted the greenback and the Japanese currency. The loonie later advanced against the US dollar after the Bank of Canada officials indicated that an increase in interest rate is likely to occur this year.
The Canadian dollar rose by 0.1 percent to trade at 99.13 cents per US dollar after touching 99.79 cents earlier. However, this gain could not be maintained after the release of Canada Retail Sales report. The report showed that Canadian retail sales notched lower on February to -0.2 percent lower than the market estimate of flat growth. The previous readings for January was at +0.5 percent.
After the release of the report, USD/CAD was pulled from sub 0.9900 level to 0.9920. However, the weakening loonie is balanced by a suffering greenback as Case-Shiller HPI report for the month of February showed a contraction of -3.5 percent. The USD/CAD cross is trading at 0.9906 just 0.01 percent up heading towards the first hurdle at 0.9930 the April 24 high exposing the 10 day moving average of 0.9948 then 21 day moving average at 0.9956 and then the April 17 high of 1.0012.
The report released earlier today showed that the Core Retail Sales without the automobile factor surpassed market expectation hitting 0.5 percent against 0.4 forecasted. It had risen from negative 0.8 percent registered in January.
A report showing that US New Home Sales plunged by 7.1 percent to 0.328 million in March has caused the US dollar to lose grounds against most pairs including the Canadian dollar. The new data is expected to affect the FOMC announcements hence causing panic in the market. The Canadian dollar has increased by 0.16 percent since the release of the report.
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