The Canadian dollar continues to improve and has posted considerable gains in the Thursday session. In the North American session, USD/CAD is trading at 1.2770, down 0.66% on the day. On the release front, the focus is on inflation indicators on both sides of the border. In Canada, the New Housing Price Index improved to 0.0%, matching the forecast. Over in the US, consumer price index indicators remained weak. CPI rebounded with a gain of 0.2%, but this fell short of the estimate of 0.3%. Core CPI edged lower to 0.1%, shy of the forecast of 0.2%. On Friday, Canada releases Employment Change and the unemployment rate. The US will release UoM Consumer Sentiment.
Oil prices remain at their highest level in 3-1/2 years, and this has boosted the Canadian currency, which is at its highest level since late April. President Trump’s bombshell announcement that the US would withdraw from the Iran nuclear deal, as well as increasing tensions in the Middle East have raised concerns of supply disruptions. Brent crude climbed to $77.87 in Thursday’s Asian session after Israel struck dozens of military targets in Syria on Wednesday.
The currency markets have not shown much interest in President Trump’s dramatic speech on Tuesday. Trump announced that the US would withdraw from the Iran nuclear deal. Trump blasted the agreement and said that the US would impose stiff sanctions on Iran. However, Britain, France and Germany have said they plan to remain in the deal, and will be holding a high-level meeting with Iranian leaders on how the agreement can be salvaged. With the US acknowledging that the White House does not have a ‘Plan B’, it’s unclear what happens next. Meanwhile, tensions between Israel and Iran are at a fever pitch after Israel struck dozens of military targets in Syria on Tuesday.
