The Canadian dollar strengthens against the U.S. dollar due to technical signals and anticipation of positive domestic retail sales data.
The Canadian dollar rose against its U.S. counterpart on Thursday as investors considered technical conditions for the currency pair and awaited domestic data that might indicate a rise in October retail sales. The loonie traded 0.6% higher at 1.4365 to the U.S. dollar, or 69.61 U.S. cents, after earlier reaching its weakest level since March 2020 at 1.4467. Michael Goshko, senior market analyst at Convera Canada, stated that the U.S.
dollar had become more technically overbought overnight against the Canadian currency than it had been in over two years. The relative strength index for the currency pair reached 80.8 on Wednesday, its highest level since September 2022. A reading above 70 signals an overbought condition. 'I wouldn't be surprised to see traders take profit around year-end as they square up and close their books on the year,' Goshko said. Wall Street's main indexes also recouped some ground a day after the Federal Reserve's projections of fewer-than-expected interest rate cuts and higher inflation next year caught some investors off guard and sent U.S. stocks tumbling. However, oil prices fell 0.8% to $70.02 a barrel as investors worried that a slower pace of Fed easing could hinder economic growth. Oil is one of Canada's major exports. Economists anticipate that Canadian retail sales increased by 0.7% in October. The data, scheduled for release on Friday, could reinforce recent evidence of some sectors of the domestic economy recovering after the Bank of Canada reduced interest rates. Canadian Prime Minister Justin Trudeau has the full backing of his cabinet of ministers to continue in that role, according to new Finance Minister Dominic LeBlanc. Canadian bond yields advanced across a steeper curve. The 10-year rose 10.5 basis points to 3.330%, after earlier touching its highest level since Nov. 25 at 3.340%
CANADIAN DOLLAR US DOLLAR CURRENCY TECHNICAL ANALYSIS RETAIL SALES
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