USD/CAD – Canadian Dollar Edges Higher on Soft US Jobless Claims

USD/CAD has posted slight gains in the Thursday session. Currently, the pair is trading at the 1.31 line. On the release front, Canadian inflation numbers disappointed, as NHPI posted a small gain of 0.1%, short of the estimate of 0.3%. In the US, unemployment claims dipped fell to 234 thousand, well short of the forecast of 249 thousand. On Friday, Canada releases employment change and unemployment rate, while the US publishes UoM Consumer Sentiment.

US crude stockpiles continue to record surpluses. On Wednesday, Crude Oil Inventories made a splash, soaring 13.8 million barrels, according to the Energy Information Administration (EIA). The indicator has recorded five straight surpluses, easily exceeding forecasts on each occasion. The huge gain also marked the highest surplus since late October. Crude posted sharp losses on Tuesday, following the release of the API inventories report, which predicted a surplus of 14.2 million, compared to a forecast of 2.38 million. US crude prices are down 2.7 percent this week, as US oil production continues to increase. The EIA says that US production in 2017 will be the highest since 1970, so cuts from OPEC and Russia may not lead to higher oil prices, due to the steady increase in US crude production. The Canadian dollar is sensitive to crude fluctuations, and stronger oil prices would likely boost the Canadian dollar.

Donald Trump hammered away at the economy during the election campaign, but was short on specifics as far as remedies. However, he did promise a significant fiscal boost through infrastructure spending and tax cuts. This led to a post-election euphoria in the markets and boosted the US dollar. Fast forward to February, and optimism has been replaced by caution and unease, as Trump continues to entangle himself in controversy, both with US trading partners and at home, with the media and Supreme Court. The markets are disappointed that Trump has not unveiled an economic plan or blueprint, limiting himself to protectionist rhetoric which has sent alarm bells ringing worldwide. On Wednesday, Goldman Sachs forecast that the administration won’t implement tax reform or infrastructure spending before 2018.

USD/CAD Fundamentals

Thursday (February 9)

• 8:30 Canadian NHPI. Estimate 0.3%. Actual 0.1% 
• 8:30 US Unemployment Claims. Estimate 249K. Actual 234K
• 10:00 US Final Wholesale Inventories. Estimate 1.0%
• 10:30 US Natural Gas Storage. Estimate -155B
• 11:35 Canadian BOC Deputy Governor Lawrence Schembri Speech
• 13:01 US 30-y Bond Auction
• 13:10 US FOMC Member Charles Evans Speaks

Friday (February 10)

• 8:30 Canadian Employment Change
• 8:30 Canadian Unemployment Rate
• 10:00 US UoM Consumer Sentiment. Estimate 97.9

*All release times are GMT

*Key events are in bold

USD/CAD for Thursday, February 9, 2017

USD/CAD February 9 at 9:45 EST

Open: 1.3146 High: 1.3168 Low: 1.3103 Close: 1.3108

USD/CAD Technical

• USD/CAD was flat in the Asian session and posted losses in European trade. The pair is steady in the North American session
• 1.3003 is providing support
• 1.3120 is a weak resistance line

Further levels in both directions:

• Below: 1.3003, 1.2922 and 1.2815
• Above: 1.3120, 1.3253, 1.3371 and 1.3461
• Current range: 1.3003 to 1.3120

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Thursday session. Currently, long positions have a slight majority (53%), indicative of slight trader bias towards USD/CAD reversing directions and moving higher.

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.