Is this the beginning of a USD rally?
The US dollar picked up steam again Friday after losing some 5.5% over the last three weeks in April against major currencies.
Over the same period, the loonie climbed close to 5% against the greenback. Rising crude oil prices, which are now nearing $60/barrel, and the more optimistic tone from Bank of Canada Governor Stephen Poloz, definitely had a hand in the CAD’s gains. Nevertheless, the upswing in the Canadian dollar appears to be drawing to a close, which would not be a disappointment to the BoC, whose growth forecasts depend on a weaker loonie to create an exporter-friendly environment.
Despite encouraging manufacturing data this morning, the euro continued the slide begun on Friday. In the past three weeks, the single currency had risen by more than 7% due in part to the temporarily weak greenback and profit-taking by hedge funds on their short euro positions.
Today, we’ll be keeping an eye on Factory Orders in the United States.
