Canadian dollar not getting a tailwind from USD weakness
The US dollar is generally weaker since the terrible December retail sales report but against CAD it's an exemption.
The big reason is that Canada is often like a levered play on the US. Soft US retail sales will mean less demand for Canadian exports, it also signals less demand for oil and the drop in crude is hurting the loonie. Finally, at the same time as the US report, Canadian data showed manufacturing sales down 1.3% in December compared to a 0.4% rise expected. The energy sector has been especially hard hit.
At the moment, the technicals are the spot to watch with USD/CAD testing 1.3329, which was the high of January 6.
