Canadian Dollar heads for fourth weekly gain on weaker US Dollar, elevated Oil prices
USD/CAD extends its decline on Friday as broad US Dollar (USD) weakness and elevated Oil prices provide a double boost to the Canadian Dollar (CAD). At the time of writing, the pair trades around 1.3745, while the Loonie is on track for a fourth consecutive weekly gain.
The Canadian Dollar (CAD) has been on a steady rise for the fourth week in a row, thanks to a weaker US Dollar (USD) and high oil prices. As of the latest data, the CAD is trading at approximately 1.3745, continuing its upward trend. The US Dollar experienced significant selling pressure on Friday after the US Treasury announced it would double its liquidity-support buybacks for longer-dated government securities to a minimum of $4 billion per operation.
This move added a double boost for the Canadian Dollar, as traders reacted positively to both the declining USD and the elevated oil prices. The US Dollar Index (DXY), which represents the strength of the USD against a basket of six major currencies, is currently at a three-month low of around 98.75. Meanwhile, West Texas Intermediate (WTI) oil prices are hovering around $86.70 per barrel, poised for a weekly gain exceeding 6%.
Canada's economy benefits from elevated oil prices since the country is a major petroleum exporter. This positive trend was further supported by an increase in Canadian retail sales, which rose by 0.6% in June, surpassing the expected 0.4% gain. Positive data such as these, along with the expectation of a potential rate hike by the Bank of Canada (BoC), further bolster the Canadian Dollar's value.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
