USD/CAD: Canadian Dollar Under Pressure, U.S. Retail Sales Disappoint
Kenny Fisher | Mar 14, 2018 09:48
The Canadian dollar has ticked higher in the Wednesday session, after considerable losses on Tuesday. Currently, USD/CAD is trading at 1.2943, down 0.17% on the day. On the release front, there are no Canadian indicators for a third consecutive day. In the U.S., key indicators were a mix. Retail Sales declined 0.1%, missing the estimate of 0.3%. On the inflation front, PPI dipped to 0.2%, but still beat the estimate of 0.1%. On Thursday, Canada releases the ADP Non-Farm Employment Change. The U.S. will publish employment claims and the Philly Fed Manufacturing Index.
On Tuesday, Bank of Canada Governor Stephen Poloz sounded dovish about future rate hikes. Poloz said that there was slack in the labor market, leaving room for the economy to grow without generating inflation. Investors took this as a message that the BoC is in no rush to raise rates any time soon, and the Canadian dollar lost ground on Tuesday. Poloz added that any rate increases would be “gradual” and dependent on economic data. It seems clear that the BoC will not be able to match the Fed pace of rate hikes, as the U.S. economy continues to outpace its northern neighbor. As well, the future of NAFTA is up in the air, with the U.S. threatening to withdraw from the agreement if Canada and Mexico do not make far-reaching concessions to the U.S. This means that the Canadian dollar could be in trouble, as rate hikes in the U.S. will make the greenback more attractive to investors.
The Federal Reserve is widely expected to raise interest rates next week. According to the CME Group (NASDAQ:CME), the odds of a quarter-point raise stand at 89 percent. What can we expect from the Fed during the year? The pressing question is how many rate hikes we will see in 2018. The current Fed projection remains at three hikes, but the superb nonfarm payrolls report last week has raised speculation that the Fed could accelerate the pace to four hikes, which would be good news for the U.S. dollar. Investors will be keeping a close eye on key U.S. data, especially inflation indicators. If these numbers improve, we’re likely to see four rate hikes in 2018.
USD/CAD Fundamentals
Wednesday (March 14)
- 8:30 US Core Retail Sales. Estimate 0.4%. Actual 0.2%
- 8:30 US PPI. Estimate 0.1%. Actual 0.2%
- 8:30 US Retail Sales. Estimate 0.3%. Actual -0.1%
- 8:30 US Core PPI. Estimate 0.2%. Actual 0.2%
- 10:00 US Business Inventories. Estimate 0.6%
- 10:30 US Crude Oil Inventories. Estimate 2.2M
Thursday (March 15)
- 8:30 Canadian ADP Non-Farm Employment Change
- 8:30 US Empire State Manufacturing Index. Estimate 15.2
- 8:30 US Philly Fed Manufacturing Index. Estimate 23.2
- 8:30 US Unemployment Claims. Estimate 230K
Get The App
*All release times are GMT
*Key events are in bold
USD/CAD for Wednesday, March 14, 2018
USD/CAD, March 14 at 8:50 EST
Open: 1.2965 High: 1.2966 Low: 1.2934 Close: 1.2943
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2757 | 1.2865 | 1.2920 | 1.3014 | 1.3165 | 1.3260 |
USD/CAD ticked higher in the Asian session and has edged higher in European trade
- 1.2920 is providing support
- 1.3014 is the next line in resistance
- Current range: 1.2920 to 1.3014
Further levels in both directions:
- Below: 1.2920, 1.2865, 1.2757 and 1.2630
- Above: 1.3014, 1.3165 and 1.3260
OANDA’s Open Positions Ratio
USD/CAD ratio is showing little movement in the Wednesday session. Currently, short positions have a majority (62%), indicative of trader bias towards USD/CAD continuing to move lower.
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.