USD/CAD is showing little activity as we begin the new trading week. USD/CAD continues to trade in the mid-1.02 range, early in Monday’s North American session. On Friday, Canadian Core CPI gained 0.2%, as expected. CPI also gained 0.2%, just under the estimate of 0.3%. Wholesale Sales was a disappointment, coming in at 0.0%. The estimate stood at 0.4%. Today’s only data is US Existing Home Sales. The markets will be hoping for a turnaround from a long streak of weak US numbers. There are no Canadian releases on Monday.
The G20 wrapped up its meeting of finance ministers and central bankers in Washington. As expected, the G20 did not reprimand Japan over its monetary policies, which have resulted in the yen taking a tumble. Although Japan has faced a lot of criticism leveled against Japan, the G20 issued a very soft statement about monetary easing which didn’t even mention Japan. This clears the way for the Bank of Japan to continue its aggressive easing policy. The yen responded by dropping to four-year lows, as the elusive 100 level is almost within reach.
The markets will be hoping for a turnaround in US numbers, after another dismal week. Thursday saw more key releases and more bad news, as employment and manufacturing numbers disappointed. Unemployment Claims came in at 352 thousand, higher than the estimate of 349 thousand. The Philly Fed Manufacturing Index dropped from 2.0 points to 1.3 points, nowhere near the estimate of 2.7 points. The weak numbers have dogged the US since March, and are raising red flags about the extent of the US recovery.
Las week, the IMF released its World Economic Outlook, which downgraded its forecast of global growth in 2013. Canada was not spared a negative report card, with a forecast of Canadian growth to 1.8% this year, down from the January forecast of 2.0%. The report also downgraded its forecasts for US growth, and this is bound to hurt the Canadian economy, which is very dependent on exports to its southern neighbor. In turn, less demand for Canadian exports will likely hurt the Canadian dollar.
USD/CAD for Monday, April 22, 2013
1.0279 H: 1.0281 L: 1.0248
USD/CAD is not showing much movement in Monday trading. The pair is currently testing the 1.0282 line. There is stronger resistance at 1.0361. On the downside, 1.0229 is providing support. This is followed by a support level at 1.o157.
- Current range: 1.0229 to 1.0282
Further levels in both directions:
- Below: 1.0229, 1.0157, 1.01 and 1.0041
- Above: 1.0282, 1.0361 and 1.0446
OANDA’s Open Position Ratios
USD/CAD ratio is quiet in Monday trading. This is consistent with what we are seeing from the pair, as USD/CAD trades in a narrow range. Increased activity in the ratio could be an early sign that the pair will break out from its current drifting.
The US dollar is putting pressure on the loonie, and the 1.03 line is in sight. We could see some movement from the pair after the release of key US housing data later today.
- 12:30 US FOMC Member William Dudley Speaks
- 14:00 US Existing Home Sales. Exp. 5.02M
*Key releases are highlighted in bold
*All release times are GMT
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