USD is down 0.6% against CAD this morning and near the lower end of its range for the last several weeks. The reason is overall USD weakness across most major currencies. There are multiple reasons for the USD weakness this morning. First, the deal in Europe on a Covid recovery package financed with bonds backed by the EU has removed a potential source of risk for global economic recovery. Second, oil prices are up close to 3% this morning. Third, while the news on the pandemic is still bad in the US, it has not deteriorated in the last few days. As a result, there is overall optimism and the USD is weaker, especially against “risk currencies” like CAD. In Canada, retail sales recovered in May by 19% which roughly matches the US retail recovery in that month. Retail sales still remain 20% under February levels.
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