Canadian Dollar gives away gains as USD bounces up following strong Retail Sales data.
Investors’ concern that Middle East conflict might escalate provides additional support to the safe-haven US Dollar.
Oil prices have depreciated nearly 3.5% from early April highs, adding negative pressure to CAD.
The Canadian Dollar (CAD) recovery attempt seen during Monday’s European session has been short-lived. The US Dollar has resumed its bullish trend as better-than-expected retail consumption data has confirmed the strong momentum of the US economy.
The strong Retail Sales figures come after last week’s sticky inflation numbers, strengthening the view that the Federal Reserve (Fed) will be keeping rates higher for longer. This is supporting the US Dollar, which has additional support from the volatile situation in the Middle East. Israel is considering retaliating against Iran, which could spark a regional conflict, which ultimately increases demand for the USD on the back of its safe-haven status.
In Canada, February’s Manufacturing Sales data improved, as expected, although Wholesale Sales stalled. Furthermore, Oil prices, Canada’s main export, are pulling back from last week’s highs, adding pressure to the Loonie.
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