USD/CAD: Canadian Dollar Unchanged, U.S. Jobs Report Next
Kenny Fisher | Dec 11, 2017 09:39
The Canadian dollar is almost unchanged to start the week. In Monday’s North American session, USD/CAD is trading at 1.2832, up 0.03% on the day. On the release front, there are no Canadian releases on the schedule. In the U.S., JOLTS Job Openings is expected to to drop to 6.03 million. On Tuesday, the U.S. releases PPI, an important inflation indicator.
The markets continue to digest Friday’s U.S. employment numbers, which were a mix. Nonfarm Employment Change softened in November, but the reading of 228,000 easily beat the estimate of 198,000. However, Average Hourly Earnings, which measures wage growth, came in at 0.2%, shy of the estimate of 0.3%. Analysts remain stumped as to why wages remain stubbornly low, given a red-hot labor market that is running at full capacity. On an annual basis, wages rose 2.5%, short of the forecast of 2.7%. The Fed is also concerned with the lack of wage growth, and this could have a significant effect on monetary policy – if wage growth and inflation shows improvement in 2018, the Fed could raise rates up to three times in 2018.
Canadian housing indicators continue to impress. On Friday, Housing Starts in November jumped to 252,000, well above the estimate of 214,000. This marked the strongest reading since March. On Thursday, Building Permits posted a strong gain of 3.5%, crushing the forecast of 1.7%. Meanwhile, the Bank of Canada did not pull any surprises and maintained the benchmark rate at an even 1.00%. The BoC is casting a worried look at NAFTA, as a protectionist-minded U.S. administration has threatened to torpedo the free-trade agreement unless Canada and Mexico make major concessions. An additional headache for the BoC is that the Federal Reserve is expected to raise rates in December and January. The BoC will have to follow suit with a raise of its own, or watch the Canadian dollar head lower against the greenback.
USD/CAD Fundamentals
Monday (Dec. 11)
- 10:00 U.S. JOLTS Job Openings. Estimate 6.03M
- 13:01 U.S. 10-y Bond Auction
Tuesday (Dec. 12)
- 8:30 U.S. PPI. Estimate 0.4%
- 8:30 U.S. Core PPI. Estimate 0.2%
*All release times are GMT
*Key events are in bold
USD/CAD for Monday, Dec. 11, 2017
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USD/CAD, Dec. 11 at 8:35 EDT
Open: 1.2853 High: 1.2865 Low: 1.2831 Close: 1.2859
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2494 | 1.2630 | 1.2757 | 1.2860 | 1.3015 | 1.3161 |
USD/CAD has edged higher in the Asian and European sessions
- 1.2757 is providing support
- 1.2860 is under pressure in resistance
- Current range: 1.2757 to 1.2860
Further levels in both directions:
- Below: 1.2757, 1.2630, 1,2494, and 1.2368
- Above: 1.2860, 1.3015 and 1.3161
OANDA’s Open Positions Ratio
USD/CAD ratio is showing little movement in the Monday session. Currently, long positions have a majority (52%), indicative of slight trader bias towards USD/CAD breaking out and moving higher.
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