USD/CAD – Canadian Dollar Dips, Investors Eye Poloz, Yellen Speeches

The Canadian dollar has posted losses in the Tuesday session, erasing the gains from Monday. Currently, USD/CAD is trading at 1.2763, up 0.43% on the day. On the release front, there are no Canadian indicators on the schedule. Bank of Canada Governor Stephen Poloz will speak at event in Montreal. In the US, today’s highlight JOLTS Job Openings, which is expected to soften to 5.98 million. As well, Fed Chair Janet Yellen will deliver remarks at an event in Washington.

Will Donald Trump succeed in overhauling the tax code for the first time in 30 years? Trump suffered a humiliating defeat with his failed health care proposal, and the President has now set his sights on tax reform. Trump wants Congress to pass legislation overhauling the tax code before the end of the year, but that will be a tall order, as most Democrats have come out against the proposal, and not all Republicans are on board. The bill would cut corporate taxes from 35% to 20%, but predictably, Democrat and Republican lawmakers are at odds as to whether the bill will lower taxes for the middle class. Expectations that Trump will cut taxes has been the catalyst for a stock market rally over the past year, and if the bill does become law, the US dollar will likely gain ground.

The Bank of Canada has said that it has no plans to raise interest rates, but it may have to reconsider if Canadian employment numbers continue to impress. In October, the economy produced 35.3 thousand jobs, well above the estimate of 15.3 thousand. This marked the highest gain since June. South of the border, job numbers were a disappointment. After a decline in September, a result of the hurricanes which battered the US, nonfarm payrolls rebounded sharply with a reading of 261 thousand. This was a respectable number, but still fell short of the forecast of 312 thousand. Wage growth also disappointed, slowing to 0.0%, short of the estimate of 0.2%. This marked the first time in 2017 that wage growth did not increase, underlining persistent weak inflation. Although Fed Chair Yellen and other Fed policymakers have expressed confidence that inflation levels will rise, this is still yet to occur, despite strong growth and a labor market at capacity.

USD/CAD Fundamentals

Tuesday (November 7)

  • 10:00 US IBD/TIPP Economic Optimism. Estimate 51.2
  • 10:00 US JOLTS Job Openings. Estimate 5.98M
  • 12:35 US FOMC Member Randal Quarles Speaks
  • 12:55 BoC Governor Stephen Poloz Speaks
  • 14:30 US Federal  Reserve Chair Janet Yellen Speaks
  • 15:00 US Consumer Credit. Estimate 18.4B

Wednesday (November 8)

  • 8:15 Canadian Housing Starts. Estimate 220K
  • 8:30 Canadian Building Permits

*All release times are GMT

*Key events are in bold

USD/CAD for Tuesday, November 7, 2017

USD/CAD Tuesday, November 7 at 7:00 EDT

Open: 1.2704 High: 1.2767 Low: 1.2703 Close: 1.2763

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2441 1.2598 1.2701 1.2778 1.2943 1.3032

USD/CAD was flat in the Asian session and has posted gains in European trade

  • 1.2701 is providing support
  • 1.2778 is under pressure in resistance
  • Current range: 1.2701 to 1.2778

Further levels in both directions:

  • Below: 1.2701, 1.2598 and 1.2441
  • Above: 1.2778, 1.2943, 1.3032 and 1.3126

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Tuesday session. Currently, long and short positions are almost evenly split, indicative of a lack of trader bias as to what direction USD/CAD takes next.

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.