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USD/CAD – Loonie Steady As Canadian Trade Balance Improves

USD/CAD edged closer to the key 1.10 line, as the Canadian dollar has posted modest gains in Thursday trading. On the release front, Canadian Trade Balance posted a surplus of three straight declines. South of the border, US Trade Balance worsened and missed the estimate. Unemployment Claims also missed the forecast for the first time in five tries, while ISM Non-Manufacturing PMI improved in March.

There was some good news for the loonie as Canada posted a trade balance of $0.3 billion, reversing a string of declines and beating the estimate of $0.2 billion. It’s been a good week for Canadian releases, as GDP and RMPI surpassed their estimates. It was a different story in the US, as the trade deficit swelled to $42.3 billion, its worst showing since June. The estimate stood at -$39.1 billion. Trade balance is closely linked to currency demand, as foreigners need to purchase the domestic currency in order to pay for that country’s exports.

US Unemployment Claims disappointed, as the key indicator jumped to 326 thousand last week, up from 311 thousand in the previous release. This missed the estimate of 319 thousand. Earlier in the week, ADP Nonfarm Payrolls jumped to 191 thousand, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand. We’ll get a look at the Unemployment Rate and NFP on Friday.

Earlier this week, Fed chair Janet Yellen said that inflation and employment levels needed to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

 

USD/CAD for Thursday, April 3, 2014

Forex Rate Graph 21/1/13

USD/CAD April 3 at 15:00 GMT

USD/CAD 1.1034 H: 1.1042 L: 1.1004

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0852 1.0906 1.1000 1.1094 1.1177 1.1319

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Thursday. The ratio has a strong majority of open long positions, indicating a trader bias to USD/CAD reversing its downward direction.

USD/CAD is steady in Thursday trading. Will the pair drop below the 1.10 line? The pair is stable in the North American session.

 

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]

Currency Analyst at Market Pulse [5]
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.
Kenny Fisher

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