The Canadian dollar is unchanged on Thursday, following losses in the past two sessions. Currently, USD/CAD is trading at the 1.32 level. It’s been a quiet week so far on the release front. That will change on Thursday, as the US publishes five key releases, led by Retail Sales and Unemployment Claims. There are no Canadian events on the schedule. Friday will also be busy, with the US releasing CPI and UoM Consumer Sentiment. Canada will publish Manufacturing Sales.
The Canadian dollar is struggling, as USD/CAD has climbed 2.7% in the past week. As the Canadian currency is sensitive to the price of oil, much of the drop can be attributed to softer oil prices. Oil prices headed downwards on Tuesday, following an International Energy Agency (IEA) report that the oil oversupply could extend into the middle of 2017. This assessment surprised the markets, as the IEA veered sharply from its report a month ago, when it projected that the market would not show any surplus for the rest of the year. The revised IEA report comes on the heels of an OPEC report on Monday, which projected the oil glut to continue into 2017 due to an increase in production from non-OPEC members. If oil prices continue to drop, the Canadian dollar could continue to lose ground.
With a crucial Federal Reserve policy meeting on September 21, the Fed has imposed a blackout period on public comments from FOMC members. This will allow the markets to be completely focused on Thursday’s key releases. The US will publish retail sales, PPI, the Philly Fed Manufacturing Index and unemployment claims. Retail Sales will be closely watched, as a weak reading will likely reduce the odds of a Fed rate hike. Recent comments from Fed officials have been almost contradictory and failed to shed any light on the Fed’s monetary plans. On Monday, FOMC member Lael Brainard sounded cautious, saying it would be prudent to maintain a loose monetary policy. Brainard noted global uncertainties and weak inflation as reasons for the Fed not to rush into raising rates. This dovish message was in marked contrast to remarks from FOMC member Eric Rosengren last week, who came out in support of a rate hike, without providing a timeline. Rosengren said that “tightening is likely to be appropriate”, and went as far as to say that the US economy could overheat if the Fed didn’t act soon. As things currently stand, a September hike has been priced in at 15%, while the likelihood of a December move is 43%.
Thursday (September 15)
- 8:30 US Unemployment Claims. Estimate 262K
- 8:30 US Retail Sales. Estimate -0.1%
- 8:30 US Philly Fed Manufacturing Index. Estimate 1.1
- 8:30 US PPI. Estimate 0.1%
- 8:30 US Core Retail Sales. Estimate 0.3%
- 8:30 US Core PPI. Estimate 0.1%
- 8:30 US Current Account. Estimate -120B
- 8:30 US Empire State Manufacturing Index. Estimate -0.9
- 9:15 US Capacity Utilization Rate. Estimate 75.8%
- 9:15 US Industrial Production. Estimate -0.2%
- 10:00 US Business Inventories. Estimate 0.1%
- 10:30 US Natural Gas Storage. Estimate 57B
Upcoming Key Events
Friday (September 16)
- 8:30 US CPI. Estimate 0.1%
- 8:30 US Core CPI. Estimate 0.2%
- 10:00 US Preliminary UoM Consumer Sentiment. Estimate 91.0
* Key releases are in bold
*All release times are EDT
USD/CAD for Thursday, September 15, 2016
USD/CAD September 15 at 8:00 GMT
Open: 1.3192 High: 1.3236 Low: 1.3187 Close: 1.3197
- USD/CAD was flat in the Asian session. In European trade, the pair posted small gains but then retracted
- 1.3120 is providing support
- There is resistance at 1.3253
Further levels in both directions:
- Below: 1.3120, 1.3028 and 1.2922
- Above: 1.3253, 1.3371 and 1.3457
- Current range: 1.3120 to 1.3253
OANDA’s Open Positions Ratio
USD/CAD ratio is showing slight movement towards short positions in the Thursday session. Currently, short positions have a strong majority (68%), indicative of trader bias towards USD/CAD breaking out and moving 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.