Canadian dollar edges up after US Retail Sales

The Canadian Dollar has recovered on Thursday after missing expectations and shrinking in January. The US dollar’s midweek surge on CPI-fueled risk aversion is getting pared back, and the CAD is finding additional support from recovering crude oil bids heading into the back end of the trading week.

Canadian Housing Starts came in below expectations, but the low-impact data saw little market movement as investors broadly focus on shifts in US data prints. A rebound in crude oil also bolsters the Canadian Dollar.

US Retail Sales declined 0.8% in January, well below the -0.1% forecast. December’s US Retail Sales saw a downside revision to 0.4% from 0.6%. January’s US Industrial Production also fell 0.1% MoM versus the forecast of 0.3%, piling onto December’s 0.0%.

Canadian Housing Starts settled to 223.6K for the year ending in January versus the 235K forecast, down even further from the previous period’s 248.9K.

Oil markets see a sharp recovery on Thursday after Wednesday’s stark decline. WTI crude oil barrels are back over $77.00, testing $77.50 during the US trading session.

The Canadian Dollar (CAD) recovered around a quarter of a percent against the US Dollar on Thursday, while shedding a quarter of a percent against the market’s strongest currency for the day in the Swiss Franc (CHF).

The US Dollar is broadly softer in the back half of the trading week, giving the Canadian Dollar a leg up.