USD/CAD sinks to session low
Everything is going right in Canada right now.
Last year's NAFTA uncertainty might have slowed the economic more than believed and now it's catching up. It's been an impressive run of data lately and that includes wholesale sales.
Today's report showed 1.7% growth compared to the 0.2% economists were expecting. That's the fifth consecutive increase.
Part of that is the unwind of auto plant shutdowns but the quick rebound shows at least some encouraging signs of demand. Automotive wholesale sales are up 10.9% from January through April.
What's given the Canadian dollar such a lift since the start of the month is that data in Canada appears to be strengthening while it's weakening elsewhere. Central banks in the US, Europe and elsewhere are shifting towards easing while the BOC has no option but to hold.
That's a major tailwind for the loonie and is beginning to weigh heavily on USD/CAD. The pair is down another 20 pips today to 1.3159 and is threatening Friday's low of 1.3151.
Beyond that there is some tough support at 1.3113 and 1.3069 at the lows of the year but it's starting to look like the long-term uptrend is broken and that the pair will settle back into the 1.20s.
