Author name: Editor

The U.S. dollar strengthened on June 18 after housing starts data far exceeded expectations, signaling resilience in the American economy. May housing starts rose to 1.63 million versus the forecasted 1.38 million, while building permits also surpassed estimates. This boosted demand for the dollar and influenced major forex pairs as follows:

– EUR/USD dropped, testing support near 1.0730 amid renewed safe-haven flows and continued ECB dovishness. Technical levels point to further downside toward 1.0660 if support breaks.
– GBP/USD slipped toward 1.2680, pressured by cautious BoE outlook ahead of this week’s decision and dollar strength.
– USD/CAD rallied, supported by dollar gains alongside softer Canadian inflation data and a pullback in oil prices.
– USD/JPY rose as U.S. yields climbed and the yen remained under pressure due to mixed BoJ signals.

Overall, stronger-than-expected U.S. housing data reinforced expectations of a steady Fed tightening path, underpinning the greenback and posing near-term headwinds to its major counterparts. Investors now look ahead to upcoming PMI releases and Fed commentary for fresh direction.

Top catalysts shaping USD/CAD this week include Canada’s inflation data, U.S. retail sales and industrial production reports, and fluctuating crude oil prices. Strong U.S. data paired with weaker Canadian inflation may push USD/CAD higher, while rising oil prices and robust Canadian CPI could strengthen the loonie. Market participants should watch these factors closely for near-term exchange rate direction.