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USD/CAD Recovers, OPEC Deal Doubts Resurface

Published January 13, 2017
  • Federal Reserve Chair Janet Yellen said yesterday that she sees no serious short-term obstacles to the US economy and that inflation is "pretty close" to policy makers' 2 percent target
  • China reported a year-on-year decline in exports of 6.1%; this was the second annual decline in a row and the worst since the Great Recession of 2008
  • Adding to this, bearish tones around the US Dollar also boosted demand for dollar-denominated commodities such as oil, which correlated with earlier gains this week
  • Weaker sentiment around the oil market caused WTI crude oil to lose over 1% by sinking to session lows near $52.40; this downturn is weighing on CAD, as sentiment remains buoyed on reports of record high Chinese crude imports
  • Skepticism over the OPEC deal, however, is causing the majority of this weak sentiment; sources told Reuters that major oil producers were unlikely to fully commit to their promised cuts
  • USD/CAD recovered from earlier losses, moving up from Thursday's near three-month low
  • United States Retail Sales (MoM) came in at 0.6% below forecasts (0.7%) for the month of December amid strong demand for automobiles by American consumers

Chart (1) US Retail Sales 2016-Current