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Canadian Dollar Mixed on Higher Auto Sales, Crashing Energy Prices

July 16, 2019 at 19:49 by Andrew Moran

Canadian coins on Canadian dollar billsThe Canadian dollar is mixed against a basket of currencies on Tuesday as investors sift through new motor vehicle sales data and foreign securities purchases for May. The loonie was sent lower on crashing energy prices, which is bad news for a resource-rich market. Traders will now wait for June inflation numbers that are expected to be lower than in May.

According to Statistics Canada, new motor vehicle sales surged 207,000 in June, up from 185,000 in the previous month. While it is a positive figure, it is lower than the market forecast of 220,000. But this is the first time that car registrations in the Great White North topped the 200,000 mark.

Following two months of slumping, foreign investors renewed their interest in Canadian securities. In May, foreign investors acquired $10.2 billion worth of Canadian securities, up from $12.7 billion in divestment in April. It has been a roller coaster ride since the end of 2018 as investment and divestment have fluctuated after months of a sideways direction.

On Wednesday, Statistics Canada will release June inflation numbers. The market is anticipating that the inflation rate will slip 0.2%, bringing the 12-month rate to 2.2%. The year-on-year core inflation rate is expected to come in at 2.6%, a 0.5% jump from May.

Moreover, May manufacturing sales data are scheduled for release midweek. After a 0.6% contraction in April, the median estimate is a 2% gain.

Energy markets are cratering on Tuesday as Hurricane Barry devastated crude oil production in the Gulf of Mexico. August West Texas Intermediate (WTI) crude futures tumbled $1.72, or 2.89%, to $57.86 per barrel on the New York Mercantile Exchange. August natural gas futures plunged $0.09, or 3.8%, to $2.315 per million British thermal units (btu). August gasoline futures fell $0.03, or 1.5%, to $1.90 a gallon. August heating oil futures shed $0.04, or 2.09%, to $1.91 per gallon.

The USD/CAD currency pair rose 0.22% to 1.3077, from an opening of 1.3049, at 19:30 GMT on Wednesday. The EUR/CAD slid 0.23% to 1.4656, from an opening of 1.4691. CAD/JPY tacked on 0.21% to 82.84, from an opening of 82.71.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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