The USD/CAD pair was slightly higher on Monday after the S&P lowered the credit rating for Greece, which pushed investors away from risky assets, overshadowing rising commodity prices, which pushed the pair to the downside earlier today.
Moreover, Canada released the housing starts index for the month of April, where housing starts fell to 179.0K, compared with the prior revised estimate of 184.7K and below median estimates of 184.0K, which further weighed down on the Canadian dollar and helped in pushing the USD/CAD pair to the upside.
Rising concerns in markets over the outlook of the European debt crisis discouraged investors to buy higher yielding assets, and accordingly, the U.S. dollar strengthened against major currencies, which pushed the USD/CAD pair to the upside.
The USD/CAD pair could still rise given that the strength of the U.S. dollar prevails in markets; nevertheless, any gains for the pair will be limited over the short term, since our medium term outlook is still favoring the USD/CAD pair to drop.
Tuesday 12:30, the U.S. will release the import price index for the month of April, where import prices are expected to have edged higher in April due to rising energy prices, as median estimates suggest import prices rose by 1.8% in April, below the prior rise of 2.7% in March, while compared with a year earlier, import prices probably increased by 10.3%, compared with the prior rise of 9.7%.
Tuesday 14:00, the U.S. will release the wholesale inventories index for the month of March, where wholesale inventories are expected to rise by 1.0% in line with the prior rise in March.
Originally posted here
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