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USD/CAD – Greenback Gains as ISM Non-Manufacturing PMI Improves

USD/CAD has edged higher in Tuesday trading, as the pair trades in the mid-1.04 range in the North American session. It’s a quiet day on the release front, with just two US releases, highlighted by ISM Non-Manufacturing PMI, which beat the estimate. There are no Canadian releases on Tuesday. 

The Federal Reserve met for a policy meeting last week, the first since Congress reached an agreement on the debt ceiling and the shutdown. As expected, the Fed said that it would maintain QE at current levels of $85 billion each month. However, the Fed’s policy statement was less dovish than expected, as the Fed noted that the economy was expanding “at a moderate pace” and left the door open for QE tapering in December. Still, the prevailing view in the markets is that short of a sharp turnaround in US numbers, QE tapering will be on hold until early 2014.

After a host of weak numbers, US numbers showed some improvement late last week. Unemployment Claims practically matched the forecast, and ISM Manufacturing PMI beat the estimate. With the Fed unlikely to taper QE before 2014, the QE uncertainty which was has been weighing on the dollar has eased, and we could see the US dollar move higher against the loonie.

Although the Bank of Canada maintained interest rates at 1% at its last meeting, the removal of the tightening bias, which had been in place since April 2012, indicates that the Bank is in no hurry to raise interest rates for the foreseeable future. This could result in investors searching for greener pastures outside of Canada, which could have a negative impact on the Canadian dollar, which has been struggling lately.


USD/CAD for Tuesday, November 5, 2013

Forex Rate Graph 21/1/13

USD/CAD November 5 at 15:00 GMT

USD/CAD 1.0451 H: 1.0453 L: 1.0417


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0282 1.0337 1.0442 1.0502 1.0573 1.0652



Further levels in both directions:


OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains by long positions in Tuesday trading. This is reflected in the current movement of the pair, as the US dollar has posted gains. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar reversing directions and moving higher.

The Canadian dollar has posted losses on Tuesday and remains under strong pressure from the US dollar. We could see this trend continue in the North American session, although further losses are likely to be limited in nature. 


USD/CAD Fundamentals


*Key releases are highlighted in bold

*All release times are GMT

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 [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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