USD/CAD – Canadian Dollar Dips on Weak Building Permits

The Canadian dollar has lost ground on Tuesday, as USD/CAD trades close to the 1.12 line in Tuesday’s North American session. The Canadian currency softened after Building Permits plunged 27.3% in the August reading. Over in the US employment data remains sharp as JOLTS Job Openings jumped to 4.84 million.

Canadian Building Permits often displays strong volatility, and this was indeed the case in the August reading, as the key indicator came in at -27.3%. This follows three months of strong gains. There was much better news on Monday, as Ivey PMI improved to 58.6 points, up sharply from 50.9 points a month earlier. The strong reading easily beat the estimate of 53.4, as the index hit its highest level in 11 months.

US job numbers continue to impress. On Tuesday, JOLTS Job Openings climbed to 4.84 million, up from  4.67 million a month earlier. The indicator is on a strong upward trend, indicative of the US employment sector. Last week, Nonfarm Employment change rebounded in September, climbing to 248 thousand. This exceeded expectations of 216 thousand. The unemployment rate dipped to 5.9%, the first time it’s been below the 6% threshold in over six years. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike. Strong employment numbers such as these could put pressure on the Fed to make an interest rate move sooner rather than later in 2015, and increased speculation about a rate move will likely boost the dollar even further.

USD/CAD for Tuesday, October 7, 2014

USD/CAD October 7 at 16:30 GMT

USD/CAD 1.1183 H: 1.1196 L: 1.1132

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0961 1.1004 1.1124 1.1278 1.1414 1.1493

 

  • USD/CAD has been choppy throughout the day.
  • 1.1124 continues to provide support.
  • 1.1278 is a strong resistance line. It has remained intact since March.
  • Current range: 1.1124 to 1.1278

Further levels in both directions:

  • Below: 1.1124, 1.1004, 1.0961, 1.0852 and 1.0775
  • Above: 1.1278, 1.1414, 1.1493 and 1.1669

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Tuesday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the US dollar has posted gains. The ratio has a majority of short positions, indicating trader bias towards the Canadian dollar reversing directions and moving to higher ground.

USD/CAD Fundamentals

  • 12:30 Canadian Building Permits. Estimate -6.0%. Actual -27.3%.
  • 14:00 US JOLTS Job Openings. Estimate 4.71M. Actual 4.84M.
  • 14:00 US IBD/TIPP Economic Optimism. Estimate 46.3 points. Actual 45.2 points.
  • 17:20 US FOMC Member Narayana Kocherlakota Speaks.
  • 19:00 US FOMC Member William Dudley Speaks.
  • 19:00 US Consumer Credit. Estimate 20.3B.

* Key releases are in highlighted bold.

*All release times are GMT

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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.