Today is a big day for the binary Canadian dollar, as data for Canada’s CPI is scheduled to be released later today. Analysts’ expectations consolidate around a reading of 0.3% for the core CPI and a reading of 0.2% for the CPI. The figures expected for the core CPI are much in line with what we have observed for the past couple of months, but the core CPI is expected to come at its lowest level since January. Earlier in the week, we saw mixed data for the binary loonie. On Monday, foreign securities purchases came much better than expected at 10.20B, the best reading of the indicator since January. Economists were projecting a much lower number – 3.41B. On Tuesday, wholesale sales were released and they also outperformed market expectations. The total value of sales at wholesale level had increased by 1.5% in May on a month over month basis, almost 4 times better than the forecast. After these excellent announcements, it was time for some bad news. Yesterday, retail sales figures disappointed, indicating that the Canadian economy is also hit by the growth problems around the world. While economists were projecting a modest increase in the sales at retail level, we actually saw a decline. That was somewhat surprising information, as earlier in the week we saw the wholesales outperform.
How all these data impact the binary USD/CAD? Well, the currency pair started the week at the lows we touched on Friday and bounced back to its 50-period moving average, trading for a brief moment above it, but later on erased its earlier gains to close slightly higher for the trading session. On Tuesday, the binary loonie gained against its American counterpart in the morning, sending the currency pair below its 200-period moving average for the first time since early May. After the announcement of the foreign securities purchases, the binary Canadian dollar pared some of the gains it had posted against its American counterpart, finishing the session close to the highs. Wednesday was a choppy day for the currency pair, as it moved in tight range, hitting a fresh new low at one point and penetrating the 200-period moving average for a brief moment. The binary USD/CAD, however, ended the session largely unchanged, despite the wholesales figures that were released. On Thursday, the binary loonie posted some serious losses, as several things occured. First of all, weak economic data was released for Canada, pertaining to its retail sales. Second of all, traders shed their holdings in risky assets and looked for safe havens to put their money into. That provided a boost for the American dollar, sending it higher against all its counterparts. And third, commodities’ prices dropped, hurting resource dependent currencies such as the binary Australian dollar and the binary Canadian dollar. The currency pair ended yesterday’s session close to its intraday highs of 1.02972. Today, ahead of the report that is scheduled to be released in just in a couple of hours, the binary loonie is trading in tight range as investors are probably waiting for the figures to give them some signals about the strength of the Canadian economy.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.