USD/CAD hovers around 1.3490 ahead of Canada Retail Sales, US Consumer Sentiment data
- USD/CAD moves sideways with a positive bias toward an upward direction.
- US Dollar could continue its winning streak on the back of US bond yields.
- Higher Crude prices contribute to limiting the losses of the Canadian Dollar.
USD/CAD attempts to retrace its recent losses, trading around 1.3490 during the early European hours on Friday. The US Dollar (USD) continues to move in an upward direction on the back of solid economic data from the United States (US), coupled with the higher US Treasury yields.
The US Dollar Index (DXY) trades around 103.40 with the 2-year and 10-year yields on US bond coupons standing at 4.35% and 4.15%, respectively, by the press time. The monthly US Housing Starts outperformed expectations in December, reaching 1.46M against the anticipated 1.426M. Building Permits (MoM) also reported growth, increasing to 1.495M and surpassing the market consensus of 1.48M. Furthermore, Initial Jobless Claims for the week ending on January 12 decreased to 187K from the previous reading of 203K.
On the other side, the Canadian Dollar (CAD) received some support from the higher Crude oil prices, given that Canada is the largest oil exporter to the United States (US). West Texas Intermediate (WTI) price grapples to extend its gains for the third consecutive day, hovering around $73.90 per barrel at the time of writing. The Crude oil prices cheer the decline in the Crude Oil stockpiles.
US Energy Information Administration (EIA) revealed the weekly measure for the week ending on January 12. US Crude Oil Stocks Change fell by 2.492M barrels against the expected decline of 0.323M barrels, swinging from the previous stockpiles of 1.338M barrels.
On Friday, economic data includes Canada's Retail Sales for November, offering insights into consumer spending trends in the country. Concurrently, the United States will release the Michigan Consumer Sentiment Index for January, indicating consumer confidence in the economic outlook. Apart from economic indicators, market participants will also pay attention to speeches from central bank officials. These speeches can provide additional context and insights into the trajectory of monetary policies.