USDCAD: Loonie Drops Despite Rising Inflation
It was a volatile day for the Canadian dollar and the Loonie was down 0.5% during the London session, with the USDCAD pair trading at around 1.3250.
The Canadian inflation accelerated further to 2.4% year on year, while core inflation also ticked higher to 1.6% from 1.5% previously. Moreover, retail sales advanced a bit from 0.0% to 0.2%, whilst the ex transportation gauge moved higher to 0.1% from -0.4% previously. Positive data failed to boost the Canadian dollar and it dropped, as previously mentioned.
Later in the day, investors will focus on the US PMI indices for November, where both the sectors are expected to remain strong and the composite PMI is seen rising to 56.0 from 54.9 previously.
Oil dropped another 5% on Friday and the WTI was trading slightly above the psychological level of 50 USD, which undermined the Canadian dollar and continues to pressure the Loonie further.
If the 1.3250 level is taken out, the pair might attack the current cycle highs at 1.3310 and the bullish trend would be confirmed. The support is still seen at the bullish trend line near 1.3180.
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