USD/CAD Canadian Dollar Unchanged Awaiting UK Election Results

The Canadian dollar was almost flat on Thursday trading despite the European Central Bank (ECB) releasing its rate statement and the awaited testimony of former FBI director James Comey before the US Senate Intelligence Committee regarding his meetings with President Donald Trump and the ongoing investigation with members of the Trump administration and Russia ties. In the end the ECB had little to add and only removed language that took off the table further rate cuts as expected as the market is now pricing in a rate hike and tapering of the massive quantitative easing program. In Washington there were few fireworks as Comey was questioned by Senator after Senator adding little in way of details as some of it might be classified or in other cases he had already addressed their questions in his prepared written statement. Markets remain in a tight range awaiting the results of the UK election with a forecasted Conservative win but given the lack of faith in pollsters it will have to be seen to be believed.

The price of oil continue to drop after Wednesday’s surprise buildup in US supplies. The fall was smaller than yesterday but geopolitical anxiety did not allow crude to gain a foothold. US producers have ramped up supply to take advantage of higher prices as Organization of the Petroleum Exporting Countries (OPEC) and other major producers agreed to limit supply until March 2018. The US has turned from an importer to an exporter of crude to the point President Trump has suggested America could sell its strategic reserves to help balance the budget.

The Bank of Canada (BoC) delivered its semi-annual Financial System Review on Thursday with a warning to rising consumer debt. The central bank is seeing positive signs of economic strength despite the risks housing prices and high consumer debt pose to the financial system. The Canadian central bank has not modified it monetary policy since cutting rates twice in 2015. The next move is more likely to be a rate hike, but the timing remains uncertain as it depends on how stable is the upward trend of the economy.


usdcad Canadian dollar graph, June 8, 2017

The USD/CAD lost 0.048 in the last 24 hours. The currency pair is trading at 1.3506 after a politically charged trading session. The testimony of James Comes and the ongoing election process in the UK have kept the loonie in a range near the 1.35 price level.

Canadian job data will be released on Friday, June 9 at 8:30 am EDT with a gain of 11,000 positions. A gain of 10,000 or more would validate the Bank of Canada (BoC) estimate of a recovery despite falling oil prices. The unemployment rate is expected to have risen to 6.6 percent as more people are looking to rejoin the workforce.



Gold lost 0.657 percent on Thursday. The yellow metal is trading at $1278.67 as the Comey testimony failed to spark a sell off of the US dollar as there was very little new under the sun from the US Senators questions. Gold will continue to be volatile as the UK elections enters its final stretch and if pollsters have called a majority win by the UK Conservative party the metal will be under pressure as risk appetite will be higher.



Oil lost 0.37 percent in the last 24 hours. The price of West Texas Intermediate is trading at $45.46 in the aftermath of the surprise buildup of weekly US inventories. Oil inventories rose 3.3 millions barrels when the forecast called for a drop of 3.5 million barrels. Gasoline inventories also gained as part of a worrisome trend that has seen demand stagnate ahead of the US driving season and putting more pressure on oil prices.

Increasing production from US shale producers has all but offset the best efforts from the Organization of the Petroleum Exporting Countries (OPEC) and other major producers that banded together to extend the production cut agreement until March 2018. The diplomatic situation with Qatar has also raised concerns on how solid is the group as internal rifts are reemerging.

Market events to watch this week:

Friday, Jun 9
4:30am GBP Manufacturing Production m/m
8:30am CAD Employment Change
8:30am CAD Unemployment Rate

*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar

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.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza