Wednesday, July 23, 2014

USD/CAD at 1.0740 on Sales

Canada’s dollar touched the strongest level in almost a week after a report showed the nation’s retail sales rose for a second month.  The currency pared the advance as a gauge of volatility dropped. The May sales figures followed a report last week that showed consumer prices climbed the fastest in more than two years in June.

“The underlying momentum in the Canadian economy is solid,” Adam Button, a currency analyst at Forexlive.com in Montreal, said in a phone interview.  The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, strengthened as much as 0.3 percent to C$1.0711 per U.S. dollar, the strongest level since July 18, before trading at C$1.0728 at 5 p.m. in Toronto, up 0.1 percent. One Canadian dollar buys 93.21 U.S. cents.

Implied volatility for one-month options on the U.S. currency against its Canadian peer fell to 4.5 percent after reaching 4.4 percent on July 18, the least on a closing basis since July 4. The measure is used to set option prices and gauge the expected pace of currency swings. The 2014 average is 6.1 percent.

Bloomberg

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