Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3630-1.3780
Euro 1.5870-1.6120
Sterling 1.8240-1.8590
WTI Oil (opening level) $103.95
The CAD/USD is opening at 1.3753 ( 0.7271 )
USD trends higher against its major peers following the release of robust US Retail Sales data, which grew by 0.5% month-over-month in April. This performance underscores the resilience of American consumer spending even in the face of elevated borrowing costs.
The USD found further support in shifts within the Federal Reserve leadership; the resignation of Stephen Miran from the Board of Governors has paved the way for Kevin Warsh to take over as Fed Chair.
These domestic factors, combined with surging inflation linked to ongoing Middle East tensions, have reinforced market expectations that the Federal Reserve will maintain high interest rates for an extended period or perhaps even implement further hikes.
Despite the broad strength of the USD, pairs like USD/CAD are facing risks due to improving geopolitical relations in Asia. Positive developments from the meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing have buoyed market sentiment.
President Trump expressed optimism on Thursday, stating his hope for a bilateral relationship that is "stronger and better than ever before," while also noting that President Xi offered assistance in de-escalating the Iran conflict. This shift toward diplomacy has provided a boost to risk appetite, which traditionally acts as a headwind for the US Dollar’s safe-haven dominance.
CAD may remain vulnerable as market anxiety stays elevated; the recent history of ship seizures and attacks in the region ensures that the "risk premium" on oil remains volatile, keeping the commodity-linked currency in flux.