USD/CAD: Canadian Dollar Steady As Construction Reports Sparkle
Kenny Fisher | Jul 10, 2018 11:29
The Canadian dollar has posted slight gains in Tuesday trading. Currently, USD/CAD is trading at 1.3128, up 0.15% on the day. On the release front, Canadian construction data beat expectations. Housing Starts jumped 248,000, crushing the estimate of 195,000. This marked the highest gain since November. Building Permits followed the same trend, climbing 4.7%, compared to the estimate of 0.1%. This was the strongest gain in four months. The U.S. releases JOLTS Job Openings, which is expected to climb to 6.88 million. The Bank of Canada will set the benchmark rate and release a rate statement Wednesday.
All eyes are on the Bank of Canada, which holds its monthly rate meeting on Wednesday. The markets are expecting that bank policy-makers will raise rates by a quarter-point to 1.50%, a level not seen since December 2008. BoC Governor Stephen Poloz said that the July rate decision would be based on economic data, and Friday’s strong employment data will be added ammunition in favor of raising rates at the upcoming meeting. The economy created 31,800 jobs in June, well above the estimate of 22,300. Wage growth also looked strong, as hourly earnings gained 3.5% in June on an annualized basis.
U.S. employment data was a mix on Friday, as job growth remained above the 200,000 level, but wage growth faltered. Non-farm payrolls dropped to 213,000, but this beat the estimate of 195,000. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S. labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S. growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S. and China.
Tuesday (July 10)
- 8:15 Canadian Housing Starts. Estimate 195K. Actual 248K
- 8:30 Canadian Building Permits. Estimate 0.1%. Actual 4.7%
- 10:00 US JOLTS Job Openings. Estimate 6.88M
Wednesday (July 11)
- 8:30 US Core PPI. Estimate 0.2%
- 8:30 US PPI. Estimate 0.2%
- 10:00 BoC Monetary Policy Report
- 10:00 BoC Rate Statement
- 10:00 BoC Overnight Rate. Estimate 1.50%
- 10:00 US Final Wholesale Inventories. Estimate 0.5%
- 10:30 US Crude Oil Inventories
- 11:15 BoC Press Conference
- 12:30 US FOMC Member Rafael Bostic Speaks
- 13:01 US 10-year Bond Auction
- 16:30 US FOMC Member John Williams Speaks
*All release times are DST
*Key events are in bold
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USD/CAD for Tuesday, July 10, 2018
USD/CAD, July 10 at 8:35 DST
Open: 1.3108 High: 1.3147 Low: 1.3101 Close: 1.3128
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2831 | 1.2970 | 1.3067 | 1.3160 | 1.3292 | 1.3436 |
USD/CAD has posted small gains in the Asian and European sessions
- 1.3067 is providing support
- 1.3160 is a weak resistance line
- Current range: 1.3067 to 1.3160
Further levels in both directions:
- Below: 1.3067, 1.2970 and 1.2831
- Above: 1.3160, 1.3292, 1.3436 and 1.3530
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