Forex: USD/CAD – Lonie rises as crude climbs above $100

Written by: Violina Todorova
July 25, 2013 Thursday July 25th:_ The US dollar remains under pressure against the loonie in early American trading today, following the release of the US Durable Goods Orders for June and initial jobless claims data for last week, with the pair falling to an intraday low so far at 1.0274.

Orders for US durable goods increased 4.2 percent last month, well above expectations for a 1.4 percent advance though short of May’s revised 5.2 percent. Airplane-making, up over 30 percent m/m, was a major contributor to the rise.
Excluding planes, trains and automobiles the numbers were flat in June, better than the expected 0.5 percent fall from May’s one percent.

In the day’s other major US release, Initial Jobless Claims for the week ended July 19 came out as a rise of 7,000 to 343,000, worse than expectations for 340,000 and up from the prior week’s 336,000, leaving little for QE-tapering advocates to cheer about.
The loonie has also firmed on its own merits, following the fixing of September-delivery crude futures at $105.39 in New York trading today. Crude oil is Canada’s single largest export product and a key factor in its trade with the US.
David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD Securities unit, observed: “The price of oil is up over 100 bucks a barrel. CAD insofar as it’s a commodity play at moments in time, I think that’s probably what’s contributing to the relative out-performance of the Canadian dollar.”

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