USD/CAD – Canadian Dollar Unchanged, US Jobless Claims Next

The Canadian dollar is unchanged in the Thursday session, after posting gains on Wednesday. In European trade, USD/CAD is trading at 1.2469, up 0.03% on the day. On the release front, US unemployment claims are expected to dip to 240 thousand, while the Philly Fed Manufacturing Index is forecast to slow to 21.9 points. There are no Canadian indicators on the schedule. On Friday, Canada will release key consumer spending and inflation data. CPI is expected to accelerate to 0.3%. The markets are predicting that retail sales will also improve to 0.3%. The US will release Existing Home Sales and Fed Chair Janet Yellen speaks at an event in Washington.

With the Canadian economy performing well, could another rate hike be in the cards? The Bank of Canada surprised with a rate hike in September, but policymakers are concerned over tensions about NAFTA. Talks between Canada, the US and Mexico over re-negotiating NAFTA have floundered, raising the possibility that Donald Trump will scrap the agreement. The BoC would prefer not to raise rates until the NAFTA negotiations are settled. However, the Federal Reserve is widely expected to raise rates in December and the BoC will be under pressure to follow suit and protect the Canadian dollar.

There was good news out of the Canadian manufacturing sector on Wednesday. Manufacturing Sales jumped 1.6% in August, ending a streak of two declines. The excellent reading was the highest gain this year, and points to a manufacturing sector which has benefited from strong global demand for Canadian products.

Federal Reserve Chair Janet Yellen is due to retire in February, and the markets are keeping close tabs on who will replace her at the helm of the powerful central bank. President Trump is leaning towards nominating economist John Taylor, who is considered more hawkish on policy than Yellen. Under Taylor, interest rates would likely move substantially higher than the current 1.25%, and a rate hike early in 2018 could strengthen the US dollar. Other candidates for the Fed Chair include current Fed Governor Jerome Powell and former Fed official Kevin Warsh.

 

Thursday (October 19)

  • 8:30 US Unemployment Claims. Estimate 240K
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.9
  • 10:00 US CB Leading Index. Estimate 0.1%
  • 10:30 US Natural Gas Storage. Estimate 59B
  • Tentative – US Federal Budget Balance. Estimate -0.9B

Friday (October 20)

  • 8:30 Canadian CPI. Estimate 0.3%
  • 8:30 Canadian Core Retail Sales. Estimate 0.3%
  • 10:00 US Existing Home Sales. Estimate 5.30M
  • 19:30 Fed Chair Janet Yellen Speaks

*All release times are GMT

*Key events are in bold

 

USD/CAD for Thursday, October 19, 2017

USD/CAD Thursday, October 19 at 7:55 EDT

Open: 1.2466 High: 1.2487 Low: 1.2451 Close: 1.2469

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2218 1.2302 1.2459 1.2598 1.2701 1.2778

USD/CAD has showed limited movement in the Asian and European sessions

  • 1.2459 was tested earlier in support and remains under pressure
  • 1.2598 is the next resistance line
  • Current range: 1.2459 to 1.2598

Further levels in both directions:

  • Below: 1.2459, 1.2302 and 1.2218
  • Above: 1.2598, 1.2701 and 1.2778

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Thursday session. Currently, long positions have a majority (60%), indicative of trader bias towards USD/CAD breaking out and moving to higher 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.

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.