USD/CAD Hits Three-Day Low as U.S. Economic Data Cools
The USD/CAD exchange rate has extended its downward trend for the third consecutive day, weakening to around 1.3850. The U.S. dollar's decline is largely due to cooling U.S. economic data, including a 0.6% month-on-month fall in retail sales in July, which missed market expectations of a 0.1% increase.
Rising international oil prices have provided relatively strong support to the Canadian dollar. Higher crude oil prices typically bolster Canada's energy export revenues and foreign exchange earnings, thereby strengthening the loonie's relative performance.
However, the boost to the Canadian dollar from rising oil prices is not unlimited. While higher oil prices enhance energy export revenues, they can also heighten global inflationary pressures and dampen consumer and industrial demand in major economies.