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USD/CAD – Steady As US Employment, Manufacturing Data Shines

The Canadian dollar is showing little movement in Thursday trading, as USD/CAD trades slightly below the 1.09 line in the North American session. In the US, Unemployment Claims excelled, dropping to a seven-year low. The Philly Fed Manufacturing Index easily beat the estimate. In Canada, Manufacturing Sales slipped in April but managed to beat the estimate. Later in the day, BOC Deputy Governor Lawrence Schembri speaks at an event in Quebec City.

In the US, Thursday’s employment and manufacturing numbers were strong. Unemployment Claims were outstanding, dropping to 297 thousand last week. This easily beat the estimate of 321 thousand and was the lowest level we’ve seen since May 2007.  On the manufacturing front, the Philly Fed Manufacturing Index dipped to 15.4 points, but this was well above the estimate of 13.9 points. As well, Empire State Manufacturing Index climbed to 19.0 points, crushing the estimate of 5.5. This was the indicator’s best showing in two years.

Low inflation levels have been a persistent problem in the US, and Fed chair Yellen highlighted this issue when speaking before Congress last week. Inflation levels are nowhere near the Fed’s target of 2.0%, and weak inflation is a sign of an underperforming US economy. Core CPI posted a weak gain of 0.2% April, edging above the estimate of 0.1%.

US Retail Sales and Core Retail Sales are key gauges of consumer spending, and are carefully tracked by the markets. Both indicators were weak in April. Core Retail Sales dropped to 0.0%, well off the estimate of 0.6%. Retail Sales followed suit, with a paltry gain of just 0.1%, compared to an estimate of 0.5%. The weak numbers could weigh on the US dollar, which has been struggling of late.

 

USD/CAD for Thursday, May 15, 2014

Forex Rate Graph 21/1/13

USD/CAD May 15 at 15:15 GMT

USD/CAD 1.0883 H: 1.0889 L: 1.0851

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0706 1.0775 1.0852 1.0906 1.10 1.1094

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in Thursday trading. This is consistent with what we are seeing from the pair, which has not shown much activity. The ratio has a majority of long positions, indicative of trader bias in favor of the US dollar moving to higher ground.

USD/CAD continues to trade close to the 1.09 line. In the North American session, the pair is steady.

 

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.