Canadian Dollar Unchanged, U.S. Jobless Claims Next
Kenny Fisher | Oct 19, 2017 09:44
The Canadian dollar is unchanged in the Thursday session, after posting gains on Wednesday. In European trade, USD/CAD is trading at 1.2469, up 0.03% on the day. On the release front, U.S. unemployment claims are expected to dip to 240,000, while the Philly Fed Manufacturing Index is forecast to slow to 21.9 points. There are no Canadian indicators on the schedule. On Friday, Canada will release key consumer spending and inflation data. CPI is expected to accelerate to 0.3%. The markets are predicting that retail sales will also improve to 0.3%. The U.S. will release Existing Home Sales and Fed Chair Janet Yellen speaks at an event in Washington.
With the Canadian economy performing well, could another rate hike be in the cards? The Bank of Canada surprised with a rate hike in September, but policy-makers are concerned over tensions about NAFTA. Talks between Canada, the U.S. and Mexico over re-negotiating NAFTA have floundered, raising the possibility that U.S. President Donald Trump will scrap the agreement. The BoC would prefer not to raise rates until the NAFTA negotiations are settled. However, the Federal Reserve is widely expected to raise rates in December and the BoC will be under pressure to follow suit and protect the Canadian dollar.
There was good news out of the Canadian manufacturing sector on Wednesday. Manufacturing Sales jumped 1.6% in August, ending a streak of two declines. The excellent reading was the highest gain this year, and points to a manufacturing sector which has benefited from strong global demand for Canadian products.
Federal Reserve Chair Janet Yellen is due to retire in February, and the markets are keeping close tabs on who will replace her at the helm of the powerful central bank. President Trump is leaning towards nominating economist John Taylor, who is considered more hawkish on policy than Yellen. Under Taylor, interest rates would likely move substantially higher than the current 1.25%, and a rate hike early in 2018 could strengthen the US dollar against gold. Other candidates for the Fed Chair include current Fed Governor Jerome Powell and former Fed official Kevin Warsh.
Thursday (Oct. 19)
- 8:30 U.S. Unemployment Claims. Estimate 240K
- 8:30 U.S. Philly Fed Manufacturing Index. Estimate 21.9
- 10 U.S. CB Leading Index. Estimate 0.1%
- 10:30 U.S. Natural Gas Storage. Estimate 59B
- Tentative – US Federal Budget Balance. Estimate -0.9B
Friday (Oct. 20)
- 8:30 Canadian CPI. Estimate 0.3%
- 8:30 Canadian Core Retail Sales. Estimate 0.3%
- 10:00 US Existing Home Sales. Estimate 5.30M
- 19:30 Fed Chair Janet Yellen Speaks
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*All release times are GMT
*Key events are in bold
USD/CAD for Thursday, October 19, 2017
USD/CAD Thursday, Oct. 19 at 7:55 EDT
Open: 1.2466 High: 1.2487 Low: 1.2451 Close: 1.2469
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2218 | 1.2302 . | 1.2459 . | 1.2598 . | 1.2701 . | 1.2778 |
USD/CAD has showed limited movement in the Asian and European sessions
- 1.2459 was tested earlier in support and remains under pressure
- 1.2598 is the next resistance line
- Current range: 1.2459 to 1.2598
Further levels in both directions:
- Below: 1.2459, 1.2302 and 1.2218
- Above: 1.2598, 1.2701 and 1.2778
OANDA’s Open Positions Ratio
USD/CAD ratio is unchanged in the Thursday session. Currently, long positions have a majority (60%), indicative of trader bias towards USD/CAD breaking out and moving to higher ground.
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