The Canadian dollar is showing little activity in Wednesday trading. USD/CAD is trading just above the 1.06 line in the North American session. In economic news, it’s a quiet day, with no major US releases. There are no Canadian events on Wednesday.
In the US, last week’s employment numbers were excellent, as Unemployment Claims, Non-Farm Payrolls and the Unemployment Rate all impressed. The Fed has said that a stronger employment picture is a prerequisite to QE tapering, and last week’s numbers certainly increase the possibility of the Fed taking action at its December policy meeting. Currently, the Fed is purchasing $85 billion in assets every month, and a Fed taper would likely boost the US dollar against the major currencies.
With memories of the October government shutdown still fresh on Capitol Hill, lawmakers have reached a budget deal which Congress will have to approve. The agreement will remove the risk of a government shutdown and reduce the deficit by a modest $23 billion. Democrats and Republicans both had criticism of the proposal, but there is general agreement in Washington that the compromise reached is a positive step which removes some of the economic uncertainty we’ve seen in recent months. Congress must approve a budget, or the US could face another government shutdown in mid-January.
Canadian inflation indicators have been sluggish, underscoring an underperforming economy with plenty of slack. On Thursday, we’ll get a look at the New Housing Price Index, an important gauge of inflation and activity in the housing industry. The index continues to post weak readings, and little change is expected for November, with an estimate of a small gain of 0.2%.
USD/CAD for Wednesday, December 11, 2013
USD/CAD December 11 at 14:10 GMT
USD/CAD 1.0615 H: 1.0617 L: 10585
- USD/CAD is subdued in Wednesday trading. The pair dropped to a low of 1.0585 late in the European session but has bounced back above the 1.06 line.
- On the upside, 1.0652 continues to provide resistance. This is followed by a resistance line at 1.0783.
- 1.0573 is providing support. This line could see more pressure if the Canadian dollar can again push below the 1.06 line.
- Current range: 1.0573 to 1.0652
Further levels in both directions:
- Below: 1.0573, 1.0502, 1.0442 and 1.0337
- Above 1.0652, 1.0783, 1.0852, 1.0945 and 1.10
OANDA’s Open Positions Ratio
USD/CAD ratio is pointing to gains in short positions in Wednesday trading. This is not reflected in the current movement of the pair, as the pair has shown little movement. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar moving to higher ground.
The Canadian dollar is trading quietly near the 1.06 line. With no major releases on the Wednesday calendar, we could see the pair remain subdued during the North American session.
- 15:00 US Treasury Secretary Jack Lew Speaks.
- 15:30 US Crude Oil Inventories. Estimate -2.2M.
- 18:01 US 10-year Bond Auction.
- 19:00 US Federal Budget Balance. Estimate -142.6B.
*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.