Feb 21, 2025 (Baystreet.ca via COMTEX) --
- Canada retail sales expected to have bounced sharply in December.
- Equities climb on tech stock optimism.
- USD trading on the defensive due to improved risk sentiment.
USDCAD: open 1.4196, overnight range 1.4169-1.4200 close 1.4175, WTI 71.71, Gold 2931.02
The Canadian dollar continues to spin its wheels but with a modestly bullish bias. The Canadian dollar continues to flirt with strong resistance levels due to renewed demand on hopes that tariff threats are merely negotiating tactics.
Those hopes may be misplaced if President Trump reacts to Trudeau taunting him after Canada beat the US in the 4-Nations final. After Canada won in overtime, Trudeau gleefully tweeted, "You can't take our country -- and you can't take our game."
Canada retail sales are expected to have jumped to 1.8% m/m from -0.7% in November. The gains will be mostly due to the GST/HST holiday and not evidence of a rebounding domestic economy.US data includes the Michigan Consumer Sentiment survey (forecast 67.8, unchanged from December) and Existing Home Sales.
Asian equity traders ignored the negative close on Wall Street, and all the major indexes except the Australian ASX 200 closed with gains. Better-than-expected earnings from Chinese tech giant Alibaba fueled the rally. European bourses are all higher, with the French CAC 40 gaining 0.40%. S&P 500 futures are flat, and the US 10-year Treasury yield dipped to 4.48%.
EURUSD traded in a 1.0463 and 1.0505 band. Prices retreated from the peak after mixed Eurozone PMI reports. The PMI data revealed the Eurozone economy is still contracting, giving traders little reason to keep buying. Many are holding back ahead of the German election this weekend.
GBPUSD rallied in a 1.2642 to 1.2679 range after January retail sales exceeded expectations, rising 1.0% versus a forecast of 0.6%. Manufacturing PMI came in at 46.4, lower than the anticipated 48.4 and below the prior reading of 48.3, and that news knocked GBPUSD from its peak.
USDJPY climbed from an Asian low of 149.29 to 151.74 after Bank of Japan Governor Kazuo Ueda said the central bank would step in if JGB yields rose significantly. Those remarks helped push the 10-year JGB yield down from 1.455 to 1.42. Japan's core inflation increased 3.2% year-over-year in January, slightly above the forecasted 3.1%.
AUDUSD opened at the bottom of its 0.6382-6409 range after a mixed PMI report provided uncertain signals. February's flash PMI data highlighted ongoing improvements in private-sector conditions, but the news was offset by a drop in business sentiment.
COMTEX_463004615/2559/2025-02-21T17:27:25
