The Canadian dollar continues to lose ground this week. In the Wednesday session, the pair is trading at 1.3380, up 0.21% on the day. USD/CAD is poised to break above the 1.34 line, for the first time since early January. On the release front, U.S., ADP nonfarm payrolls dipped to a three-month low. The indicator fell to 183,000, down from 213,000 in the previous release. In Canada, the trade deficit ballooned to C$4.6 billion in January. Later in the day, Canada releases Ivey PMI and the Bank of Canada is expected to hold the benchmark rate at 1.75%.
After raising rates three times in 2018, the Bank of Canada has eased up on rate hikes in 2019. With the BoC expected to remain on the sidelines at the Wednesday policy meeting, the spotlight will be on the BoC rate statement. Policy-makers have said it expected the economic slowdown in Canada to be temporary, but a sluggish Q4 has raised concerns about the health of the economy. The BoC hiked rates three times last year, and this may have hurt consumer spending, which was weak in the fourth quarter. With economic growth headed in the wrong direction and inflation levels below the BoC target of 2.0%, policy-makers are unlikely to raise interest rates in the near term.
In the U.S., the markets are keeping an eye on U.S. employment numbers. We’ll get a look at unemployment claims on Thursday, followed by nonfarm payrolls and wage growth, which will be released on Friday. Analysts are expecting mixed numbers on Friday. Wage growth is expected to improve to 0.3%, but nonfarm payrolls are projected to slide to 185,000, after a strong gain of 304,000 in the previous release. The unemployment rate has been at record lows, and is expected to dip to a sizzling 3.9% in the February report.
USD/CAD Fundamentals
Wednesday (March 6)
- 8:15 US ADP (NASDAQ:ADP) Nonfarm Employment Change. Estimate 190K. Actual 183K
- 8:30 Canadian Trade Balance. Estimate -2.4B. Actual -4.6B
- 8:30 Canadian Labor Productivity. Estimate -0.2%. Actual -0.4%
- 8:30 US Trade Balance. Estimate -57.8B. Actual -59.8B
- 10:00 BoC Rate Statement
- 10:00 BoC Overnight Rate. Estimate 1.75%
- 10:00 Canadian Ivey PMI. Estimate 55.1
- 10:30 US Crude Oil Inventories. Estimate 1.2M
- 12:00 US FOMC Member Williams (NYSE:WMB) Speaks
- 14:00 US Beige Book
Thursday (March 7)
- 8:30 US Unemployment Claims. Estimate 225K
- 8:30 Canadian Building Permits. Estimate -4.8%
*All release times are EST
*Key events are in bold
USD/CAD for Wednesday, March 6, 2019
USD/CAD, March 6 at 7:30 EST
Open: 1.3352 High: 1.3381 Low: 1.3350 Close: 1.3380
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.3125 | 1.3200 | 1.3290 | 1.3383 | 1.3445 | 1.3552 |
USD/CAD posted slight gains in the Asian session and is showing limited movement in European trade
- 1.3290 is providing support
- 1.3383 is under pressure in resistance as USD/CAD continues to move higher
- Current range: 1.3290 to 1.3383
Further levels in both directions:
- Below: 1.3290, 1.3200, 1.3125 and 1.3049
- Above: 1.3383, 1.3445 and 1.3552
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