• Canadian Dollar pushes up a few pips as traders await the release of key macro data from both the US and Canada. 

• The data is likely to inject considerable volatility in the pair if it differs from estimates. 

• Monday’s weak close reduces the technical bullishness of the strong reversal that started on Friday for USD/CAD.

The Canadian Dollar (CAD) edges up marginally against the US Dollar (USD) on Tuesday, as traders bide their time before key data releases from Canada and the US. Out of Canada inflation data for June is scheduled for release at 12:30 GMT whilst from the US, at the same time, the US Census Bureau is set to publish Retail Sales data for June. 

The USD/CAD pair trades in the 1.32s as the US session gets underway.  

Canadian Dollar news and market movers 

• The Canadian Dollar edges higher against the US Dollar as traders await key market moving data from both the US and Canada. 

• The Canadian headline Consumer Price Index (CPI) is forecast to show a 3% rise in June compared to the 3.4% registered in May. 

• Core CPI (excluding volatile Food and Energy) is forecast to come out at 3.5% in June from 3.7% a year earlier. On a monthly basis, the measure is expected to increase by 0.5%, more than the 0.4% seen in May.   

• An unexpected rise in inflation, especially core inflation, would trigger a rally in CAD (bearish for USD/CAD) as it would heighten expectations of the Bank of Canada (BoC) raising interest rates at its September meeting. Higher interest rates are supportive for the local currency since they attract greater inflows of foreign capital. The opposite will be the case if the CPI data comes out lower.

• US Retail Sales are forecast to rise 0.5% in June from 0.3% in May, and Retail Sales Ex Autos by 0.3% from 0.1%. 

• A higher-than-expected result would support the US Dollar (bullish for USD/CAD) as it would show the US economy is in rude health, making it more likely the US Federal Reserve (Fed) will have to raise interest rates several times before bringing inflation under control. The opposite is true if the data falls below estimates. 

• Friday saw a strong reversal in USD/CAD on the back of a combination of weaker Crude Oil prices, which weighed on CAD, and much better-than-expected Michigan Consumer Sentiment data out of the US, which supported the US Dollar