USD/CAD bulls attack 1.2700 on the back of US retail sales

  • The USD/CAD climbs towards the 1.2700 area.
  • The market sentiment is mixed, with European stocks up while American US indices fall.
  • US retail sales rose unexpectedly, boosting the US dollar.

The USD/CAD is rallying on the New York session. The pair is trading at 1.2687, up 0.50% on the back of better than expected US retails sales data and falling oil prices, which drag down the Canadian dollar at the time of writing.

The market sentiment is mixed. In Europe, major stock indices are rising. Meanwhile, the three major indices are down in the US, while the US 10-year benchmark rate soars three basis points, sitting at 1.336%.

US mixed economic data boosts the US dollar

In the US, Retail Sales improved surprisingly in August, climbed 0.7% versus -0.8% foreseen by economists. Commenting on the US data, “the US consumer was out and about in August, contrary to the depressing University of Michigan’s ten-year trough in its Consumer Sentiment Index,” said FXStreet Analyst Yohay Elam. 

At the same time, the Initial Jobless Claims report -ignored by the awaited Retail Sales- increased to 332K against 328K, worse than expected.

Despite the mixed data, the US Dollar Index (DXY), which measures the greenback’s performance against six peers is surging almost half percent at 92.95, just shy of the 93.00 psychological level.

In Canada, the Housing Starts rose to 260.2K versus 270.7K. Further, the Whole Sales for July decreased 2.1% against the -2.1% expected by economists.

Technical levels to watch for

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