Canadian Dollar Hits 11-year Lows


The USD/CAD posted new 11-year highs of 1.3384, and remained near the top of its range in early North American trade. WTI crude prices moved to nearly two-week lows of $44.17, while global growth fears remain in place, and risk-off sentiment prevails, all weighing on the CAD. Monday’s weaker than expected Pending Home sales and Dallas Fed index did little to erode the downward slide in the Loonie.

On the docket Tuesday is Canadian inflation data. The industrial product price index, is expected to fall 1.0% month over month in August after the 0.7% gain in July. A 3.6% month drop in the CPI’s gasoline price index drives our projection for a pull-back in the IPPI. The Canadian dollar depreciated in August, which should partly offset the gasoline price drag. The IPPI is expected to post a -1.2% year over year rate of decline in August after the 0.1% rise in July. The RMPI is projected to fall 7.0% in August, driven lower by the price of oil

The currency pair has pushed higher and is on the road to test the 1.40 highs. Support is seen near the 10-day moving average at 1.3290. Momentum on the currency pair has turned positive with the MACD (moving average convergence divergence) index generating a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread.

The post Canadian Dollar Hits 11-year Lows appeared first on Forex Circles.

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