USD/CAD – Canadian Dollar Slide Continues on Trump Win, US Jobless Claims Shine

USD/CAD continues to post strong gains in the Thursday session, following the upward movement seen on Wednesday. In the North American session, USD/CAD is trading at 1.3480. On the release front, Canadian NHPI posted slight gains of 0.2%, matching the forecast. In the US, unemployment claims dropped to 254 thousand, marking a 4-week low. On Friday, the US will release UoM Consumer Sentiment. The indicator is expected to edge lower to 87.4 points.

The Canadian dollar took traders on wild ride on Wednesday, courtesy of the shock result in the US election. The US dollar jumped 1.8% in a tumultuous Asian session, but then gave up some of these gains. USD/CAD continues to rally on Thursday. The volatility seen across equity and currency markets was triggered by the unexpected election victory of Donald Trump. Hillary Clinton was widely expected to cruise to the White House, with almost all pundits confidently predicting that Trump had no chance of winning. Trump’s election victory, which has already been labeled the most stunning win in US election history, sent shock waves across global markets to an extent not seen since the Brexit vote in June. As the dust begins to settle, it is already apparent that global markets were poorly positioned heading into the vote, overconfident that voters would reject Trump and hand Clinton a victory.

The Trump election victory also shook up the odds of a December rate hike by the Federal Reserve. The odds dropped as low as 40 percent earlier in the day, but recovered and surged to 76 percent. Currently, the odds are back at 71 percent, the same level they were at just before the election. Despite this recent volatility, it’s looking quite positive for a rate hike, which would mark the first rate move by the Fed since last December. Meanwhile, the markets will be watching to see if Fed chair Janet Yellen can work with President-elect Trump. During the election campaign, Trump harshly criticized Yellen, saying she was “too political”. If Yellen were to choose to resign, the shock waves will be sure to affect the US dollar.

Fed Hike Back On With Trump Win

USD/CAD Fundamentals

Thursday (November 10)

• 8:30 Canadian NHPI. Estimate 0.2%. Actual 0.2%
• 13:30 US Unemployment Claims. Estimate 267K. Actual 254K
• 14:15 US FOMC Member James Bullard Speaks
• 15:30 US Natural Gas Storage. Estimate 53B
• 18:01 US 30-year Bond Auction
• 19:00 US Federal Budget Balance. Estimate -81.9B

Friday (November 11)

• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 87.4

*All release times are EDT

*Key events are in bold

USD/CAD for Thursday, November 10, 2016

USD/CAD November 10 at 8:40 GMT

Open: 1.3409 High: 1.3498 Low: 1.3386 Close: 1.3481

USD/CAD Technical

• USD/CAD was flat in the Asian session. The pair has posted gains in European trade
• 1.3457 remains busy. Currently, it is a weak support line
• There is resistance at 1.3551

Further levels in both directions:

• Below: 1.3457, 1.3371, 1.3253 and 1.3120
• Above: 1.3551, 1.3648 and 1.3782
• Current range: 1.3457 to 1.3551

OANDA’s Open Positions Ratio

USD/CAD ratio has shown slight movement towards long positions. Currently, short positions command a strong majority (67%), indicative of trader bias towards USD/CAD reversing directions and moving to lower ground.

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.