- US Existing Home Sales continue to deteriorate and weigh on the US Dollar.
- Retail Sales in Canada dropped, though improved in November, compared with October.
- Fed’s Patrick Harker supports 25 bps rate hike increases to the Federal Funds rate.
USD/CAD is registering moderate losses during the North American session, falling from daily highs nearby 1.3500 after the release of US and Canadian data, bolstering the Loonie (CAD), which is trimming some of its weekly losses. At the time of writing, the USD/CAD exchange hand is at 1.3418, below its opening price.
US Existing Home Sales deteriorated, while Canada’s Retail Sales improved
Wall Street portrays an upbeat sentiment. The economic calendar in the United States (US) reported that Existing Home Sales for December retreated for the eleventh consecutive month. Sales retreated by 1.5% from November.
“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR Chief Economist Lawrence Yun. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”
Across the border, Canada’s docket reported retail sales, which dropped by -0.1% MoM in November but improved as October’s data showed sales plunging -0.5%, according to Statistics Canada.
Aside from economic data releases, the USD/CAD was also underpinned by an upbeat market sentiment. The pair dropped beneath the 20-day Exponential Moving Average (EMA) at 1.3470 and also tumbled below the 100-day EMA at 1.3426. Hence, the USD/CAD bias is shifting from neutral-biased to neutral-bearish.
Elsewhere, a slew of Fed officials, namely Philadelphia Fed President Patrick Harker, opened the door for a downshift in interest rate increases, saying “Hikes of 25 basis points will be appropriate going forward.” He expects the US economy to grow by 1% and the unemployment rate to jump to 4.5% from 3.5%. Later, KansasCiti Fed President Esther George said that the Federal Reserve must be “patient” to see if inflation in the services sector is waning.
USD/CAD Key Technical Levels