Kenny Fisher | Mar 14, 2019 09:30
The Canadian dollar has lost ground in the Thursday session. In the North American trade, the pair is trading at 1.3340, up 0.30% on the day. On the release, U.S. unemployment claims climbed to 229,000, above the estimate of 225,000. Canadian New Housing Price Index declined 0.1%, after posting five straight readings of 0.0%. On Friday, the U.S. publishes the Empire State Manufacturing Index and UoM Consumer Sentiment, and Canada releases manufacturing sales.
Was the Bank of Canada too aggressive with its rate hikes? The bank raised rates five times between July 2017 and October 2018, but has since stayed on the sidelines. With the Canadian economy in a slowdown, the bank could stay on the sidelines until the second half of 2019. The sharp jump in rates may have been too much for the economy to handle. One sore spot is the housing sector, which has declined for five straight months, as higher rates have made mortgages more expensive and reduced home purchases. If the economy does not rebound, policy-makers will have to consider a rate cut, which could stimulate economic activity but would push the Canadian dollar downwards.
In the U.S., February consumer inflation numbers were soft, which means there is little pressure on policy-makers to raise rates in the near future. Core CPI edged down to 0.1%, while CPI remained steady at 0.2%. Inflation remains well below the Federal Reserve’s target of 2.0 percent, so there is little pressure on the Fed to raise rates anytime soon. Policy-makers have been signalling that the Fed could stay on the sidelines until the second half of 2019, and this stance was underscored by Fed Chair Jerome Powell in a television interview earlier this week. Powell left no doubt about where the Fed stands, saying that the Fed would remain patient and was in no hurry to change interest rate policy. The dovish stance of the Fed could weigh on the greenback, as a lack of rate hikes makes the greenback less attractive to investors.
USD/CAD Fundamentals
Thursday (March 14)
Friday (March 15)
*All release times are DST
*Key events are in bold
USD/CAD for Thursday, March 14, 2019
USD/CAD, March 14 at 8:50 EST
Open: 1.3300 High: 1.3342 Low: 1.3387 Close: 1.3340
USD/CAD Technical
S3 | S2 | S1 | R1 | R2 | R3 |
1.3125 | 1.3200 | 1.3290 | 1.3383 | 1.3445 | 1.3552 |
USD/CAD ticked higher in the Asian session and is showing little movement in European trade
Further levels in both directions:
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.