After gains on Thursday, the Canadian dollar has settled down. USD/CAD is trading in the high-1.01 range in Friday's North American session. In economic news, US retail sales and unemployment figures beat expectations on Thursday. Looking at Friday's releases, US PPI rose 0.5%, a three-month high. The markets are keeping an eye on UoM Consumer Sentiment, which will be released later in the day. Canadian Manufacturing Sales looked awful, dropping 2.4%. The estimate stood at 0.3%.
On Thursday, the US posted three key releases, and the news was good across the board. Retail Sales jumped from 0.1% to 0.6%, surpassing the estimate of 0.4%. Core Retail Sales also climbed nicely, from -0.1% to 0.3%. This matched the market forecast. Unemployment Claims looked very sharp, as the indicator dropped to 334 thousand, well below the estimate of 354 thousand. If the US can put together additional solid numbers, it could be a sign that the recovery is deepening. Canadian releases were not as sharp as those south of the border. NHPI posted a gain of 0.2%, short of the estimate of 0.3%. Capacity Utilization Rate came in at 81.1%, shy of the estimate of 81.3%.
The positive US releases could affect the US Federal Reserve’s QE program, which involves the purchase of $85 billion in assets each month. The Fed has said that it won’t scale back the program before it sees a stronger economy and an improving employment picture. Although US releases have generally been mixed, speculation is rising that the Fed could take action in the next few months. Since QE is US dollar-negative, any tapering of QE could give a boost to the greenback against the major currencies.
USD/CAD for Friday, June 14, 2013
USD/CAD 1.0177 H: 1.0187 L: 1.0155
USD/CAD remains within striking distance of the 1.02 level. USD/CAD continues to receive support at 1.0157, but this is a weak line, and could be tested if the Canadian dollar strengthens. The next support level is at the round number of 1.01. On the upside, the pair continues to face resistance at 1.0229. This is followed by stronger resistance at 1.0282.
- Current range: 1.0157 to 1.0229
Further levels in both directions:
- Below: 1.0157, 1.01, 1.0058 and 1.00
- Above: 1.0229, 1.0282, 1.0337, 1.0442 and 1.0502
OANDA's Open Positions Ratio
USD/CAD ratio is unchanged in the Friday session. This is reflected in the pair, which is showing little movement. The ratio is evenly split between long and short positions, indicating a lack of bias as to what direction the USD/CAD will take.
The Canadian dollar has gained around two cents in the month of June, and is at its highest level since mid-May. We could see some activity from the pair, as both Canada and the US released key data earlier today, with one more major release still to come from the US.
- 12:30 Canadian Manufacturing Sales. Estimate 0.3%. Actual -2.4%.
- 12:30 US PPI. Estimate 0.1%. Actual 0.5%.
- 12:30 US Core PPI. Estimate 0.1%. Actual 0.1%.
- 12:30 US Current Account. Estimate -110B. Actual -106B.
- 13:00 US TIC Long-Term Purchases. Estimate 35.0B. Actual -37.3B.
- 13:15 US Capacity Utilization Rate. Estimate 77.9%. Actual 77.6%.
- 13:15 US Industrial Production. Estimate 0.3% Actual 0.0%.
- 13:55 US Preliminary UoM Consumer Sentiment. Estimate 84.9 points.
- 13:55 US Preliminary UoM Inflation Expectations.
*Key releases are highlighted in bold
*All release times are GMT
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