Canadian Dollar Gets Boost in Forex Trading from Retail Sales Data

Economic news coming out of Canada is giving the loonie a boost in currency trading on the FX market. The Canadian dollar is moving higher in forex trading with the news that retail sales have increased at a faster pace than expected.

Another factor helping the Canadian dollar in forex trading is the fact that oil prices have seen a boost today. Indeed, with the spike earlier today, oil prices reached $74 a barrel before falling back a bit. Because oil is so important to the loonie in currency trading, it is little surprise that this sort of support is helping.

GFT's Boris Schlossberg has more forex analysis with regard to the Canadian dollar in forex trading against the U.S. dollar in FX360:

The Canadian dollar jumped on the news with USD/CAD  breaking below the 1.0750 level in post reaction trade. The loonies has been a strong beneficiary of higher crude prices which are currently hovering near the $75/bbl level. Should crude remain at these elevated levels or even push higher, Canadian economy will see its income expand which is turn will drive growth higher. For the time being loonie remains well bid and if crude breaks the $75/bbl barrier in NYMEX trade today, USD/CAD  could test the 1.0700 level as the day progresses.

U.S. Dollar Mixed in Currency Trading

The U.S. dollar is mixed in currency trading against the majors today. Risk aversion at first blush from Asian trading appeared to provide a reason for the U.S. dollar to gain as investors sought a safe haven. However, things haven't played out like that at all.

Instead, risk aversion is decreasing as the European stock session ends higher, and as the U.S. stock market opens higher, continuing higher in early afternoon trading. This is causing the euro to reassert itself today in forex trading. But there is an underlying element of risk aversion that is helping the Japanese yen against the greenback.

The sterling, on the other hand, is lower against the U.S. dollar as uncertainty about the British economy continues. However, the FTSE 100 is higher today, and that should count for something with the U.K. pound in forex trading.

Risk Aversion Sends Pound, Euro Lower in Forex Trading

Risk aversion ticked up earlier today as Asian equity markets declined. As a result, it was really no surprise that the pound and the euro moved lower in forex trading on the currency market. Indeed, earlier today, it was clear that concerns about risk and the global economic recovery were taking center stage as the euro fell below 1.4300 and the sterling dropped below 1.6400 in currency trading.

Things could be turning around now, though. Barack Obama announced that he is re-nominating Ben Bernanke as Fed chair. This is providing some hope for the U.S. stock market, and European markets ended up closing higher. The euro is back above 1.4300 in forex trading. The pound is still down, though.

It is possible that the pound could get some new upward momentum if stocks in Britain continue to do well, and evidence of an improvement in economic conditions is seen.

Ben Bernanke Nominated for Another Term as Fed Chair

Ben Bernanke has been nominated for another term as Federal Reserve Chairman. Bernanke just finished his first four-year term in that position, and President Obama has expressed his confidence in him. CNN Money reports on Obama's remarks as he nominated Bernanke:

"Ben Bernanke, has led the Fed through the one of the worst financial crises that this nation and this world have ever faced," Obama said from Martha's Vineyard, Mass., as Bernanke stood by his side. "As an expert on the causes of the Great Depression, I'm sure Ben never imagined that he would be part of a team responsible for preventing another."

Obama said that Bernanke's "background, temperament, his courage, and his creativity" helped him to prevent another Great Depression.

The stock market, at least, appears to be happy with the decision, since it is rallying. The U.S. dollar is lower today, as risk appetite starts to gain some traction.