Canadian Dollar grinds out meager recovery ahead of Tuesday's US PMI figures

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The Canadian Dollar (CAD) is moderately higher on Monday, trading into the green against most of its major currency peers. Canada brought strictly low-tier data to the table on Monday with an uptick in the Raw Materials. At the same time, Industrial Product Prices met expectations, printing higher but less than the previous figure. The Canadian New Home Price Index flattened in March, missing forecasts while retreating slightly from the same period last year. Tuesday's US PMIs expected to show a slight uptick in activity. Canadian Industrial Produce Prices came in at the expected 0.8% in March, easing back slightly from the previous month’s 1.1% (revised upward from 0.7%). The Canadian New Housing Price Index flatted in March, printing 0.0% versus the forecast steady hold at 0.1%. YoY NHPI eased back -0.4% as housing prices wobble following years of accelerated growth. Canada’s Raw Material Price Index jumped 3.7% in March, vaulting over the forecast 2.9% compared to February’s 2.1%. Canadian February Retail Sales due to print in the midweek, forecast to rebound to 0.1% on Wednesday after January's -0.3% decline. Tuesday’s US S&P Global Purchasing Managers Index (PMI) will be the key data print for the early week, with the Manufacturing component forecast at 52.0 (previous 51.9) and the Services component also anticipated to print at 52.0 (last 51.7). The Canadian Dollar is mounting a slow recovery, with the USD/CAD pair targeting 1.3700. The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation, and the Trade Balance. The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates. The price of Oil is a key factor impacting the value of the Canadian Dollar. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar.

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