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Robust sales data set to extend Canadian dollar gains

business-articlesRobust sales data set to extend Canadian dollar gains
  • Canadian dollar strengthens as sales data improves
  • Weaker Richmond Fed manufacturing index could dent US dollar
  • Euro looks to recover after underwhelming Eurozone PMIs
 Stronger sales data bolsters Canadian dollar
After Canadian retail sales bettered expectations with stronger growth in February the mood towards the Canadian dollar improved.
CAD exchange rates could find further support this afternoon if the corresponding wholesale trade sales data shows a similar uptick on the month.
Fresh evidence that the Canadian economy is strengthening would diminish the risk of the Bank of Canada (BoC) loosening monetary policy, increasing the appeal of the Canadian dollar.
If wholesale trade sales lose momentum, however, this could see CAD exchange rates return to a weaker footing.
US dollar vulnerable to weaker manufacturing index
Last Thursday’s US advance retail sales data saw USD exchange rates trending higher ahead of the Easter weekend as confidence in the economic outlook picked up.
However, the US dollar remains vulnerable to any signs of a slowdown in today’s Richmond Fed Manufacturing Index.
Signs that the US manufacturing sector is continuing to weaken under pressure from increased global trade tensions may dent USD exchange rates.
Another better-than-expected reading, on the other hand, could encourage the US dollar to extend its bullish trend further.
Euro under pressure after weak Eurozone PMIs
April’s underwhelming set of Eurozone manufacturing and services PMIs left the euro under pressure last week, with the economy looking at increasing risk of stagnation.
As economic growth momentum appeared to fade further, dragged down by a struggling German manufacturing sector, the appeal of the single currency naturally diminished.
Demand for the euro could pick up this afternoon, however, if the latest Eurozone consumer confidence index shows signs of improvement.
Although the index is expected to remain within negative territory any signs of a recovery could give EUR exchange rates a boost.
Upcoming Data:
Tuesday, 23rd April 2019
13:30 CAD Wholesale Trade Sales
15:00 USD Richmond Fed Manufacturing Index
15:00 EUR Eurozone Consumer Confidence Index
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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