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USD Moves Lower After Dovish Fed Comments; Loonie Held Back by Lackluster Retail Sales Data
Published November 23, 2017
USD/CAD is mixed this morning as yesterday’s surprisingly dovish remarks from the Federal Reserve continue to weigh on the US dollar. The greenback experienced its largest drop since May 16, 2017 yesterday, causing a 0.8% drop in the US dollar index.
Meeting minutes from the Federal Reserve showed that “many participants” had concern over the outlook of US inflation, echoing dovish comments from Janet Yellen; the Fed’s comments ultimately did confirm that expectations of strong economic growth and an improving labour market will warrant future interest rate increases from the central bank.
The Canadian dollar is also showing weakness this morning after a disappointing data release on Canadian retail sales showed meager 0.1% month-on-month growth versus expectations of 0.9%. Gasoline sales were the main contributor of this increase while sales for clothing, shoes, and motor vehicle parts decreased.
Chinese stocks experienced a sharp loss as the Shanghai Composite decreased by 2.3% this morning. European shares moved higher on impressive manufacturing data while US shares remain quiet due to the US Thanksgiving holiday.
Oil prices are lower this morning, however, remain near recent highs as data showed that US domestic crude stock piles have dropped by 15%; the commodity may face some headwinds as a Russian minister noted that the OPEC-led production cut drop hurt the domestic Russian economy.