CAD impacted as Canadian Trade Balance falls short

The Canadian dollar has experienced a significant decline, with the International Merchandise Trade and building permits falling more than anticipated. The recovery of the crude oil market is limiting the support of the Canadian currency.

The Canadian dollar reached a new low for the week on Tuesday, with markets retreating into the US dollar as Canada’s economic data fell short of expectations.

The International Merchandise Trade Balance in November fell from October’s 14-month peak to 1.57 billion, while Canada Building Permits fell by nearly 4%. Crude Oil is looking for a rebound from Monday’s slump, but topside momentum remains limited, leaving crude oil largely flat on the week.

The US trade deficit fell less than expected, with the Goods Trade Balance for November bouncing slightly from a slightly-revised -90.3 billion to -89.4 billion.

The US Consumer Price Index (CPI) inflation report on Thursday is expected to be the main focus of the market, with the headline CPI inflation rate predicted to increase to 3.2% YoY in December.