CAD Surges Against USD Amid Disappointing US Data
The Canadian Dollar (CAD) gained strength against the US dollar (USD) on Monday, reaching around 1.3870 during Asian hours, as it continued its decline for a third consecutive session.
This was largely due to disappointing U.S. macro data and shifting expectations for Federal Reserve policy, which weakened the USD. The Retail Sales data from the U.S. Census Bureau showed a 0.6% month-over-month decline in July, falling short of the anticipated 0.1% growth.
The weaker figures added to a run of softer U.S. data, including CPI and PPI releases, prompting traders to scale back expectations for additional Fed tightening. According to the CME FedWatch tool, markets now assign a 33.1% probability to a rate hike at the next meeting, down from 44% a week earlier.
The CAD also received support from higher crude prices, with West Texas Intermediate (WTI) crude trading around $81.80 per barrel, extending its advance for a second straight session.