Friday was dictated by data from North America. The USA showed good results and the US dollar exchange rate was going up. However, Canada could not boast the same. The main event, however, is the opening of the oil market and the sudden drop in its prices.
Good data from across the ocean
On Friday, we learned about orders for goods in the USA as well as a report from the University of Michigan. Both readings were a pleasant surprise. The value of orders increased in September by 0.4%, while an increase of only 0.1% was forecasted. For durable goods, a decrease of 0.8% was noted. However, these data have a much broader range of results relative to the main reading of orders. This result was also better than expected, which predicted a decrease of 1.1%. If we add to this the University of Michigan index at the level of 70.5 pts, which is 1.5 points above expectations, it is not surprising that the dollar was gaining in value.
Wake up in the fuel market
The price of crude oil is highly volatile during conflicts in the Middle East. Currently, however, despite weekend attacks, there was a noticeable discount in the “black gold” market. The price, which was still rising before the weekend and reached $76 per barrel, fell sharply on Monday’s opening. At the moment of writing this text, we are already below $72. Why is the raw material cheapening when another wave of attacks appears? The reason is that it is happening to a lesser extent than expected. Markets were very afraid of conflict escalation, but the current attacks were rather considered as a symbolic action, not an actual intensification. Middle Eastern logic, however, requires responding to every attack not to show weakness.
The weakness of the Canadian dollar
On Friday, data on retail sales in Canada were also published. The total result was +0.4%, while analysts expected a 0.5% increase. Although the difference seems small, attention was also paid to data excluding car sales. Forecasts spoke of an increase of 0.2%. However, it turned out that we saw a decrease of as much as 0.7%. This caused the Canadian dollar to retreat not only from its American colleague but also from other currencies.
Today is a day off in the Czech Republic, and in the macroeconomic data calendar it is worth paying attention to:
12:00 – UK – CBI retail sales.
Maciej Przygórzewski – chief analyst at InternetowyKantor.pl
Source: https://ceo.com.pl/dolar-amerykanski-zyskuje-a-kanadyjski-slabnie-gwaltowna-przecena-ropy-92515
