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USD/CAD: Flat as Markets Eye Key US Numbers

USD/CAD is listless on Tuesday, as  the pair continues to trade in the mid-1.07 range early in the North American session. The loonie has enjoyed an excellent June, gaining over two cents against its US counterpart. On the release front, we’ll get a look at two key US releases, CB Consumer Confidence and New Home Sales, the second key housing event this week. There are no Canadian releases until Friday.

Canadian releases look strong last week, highlighted by positive inflation and retail sales numbers on Friday. Core CPI and CPI both posted gains of 0..5%, beating their estimates of 0.2%. Core Retail Sales improved to 0.7%, surpassing the forecast of 0.4%. Finally, Retail Sales jumped 1.1% last month, crushing the estimate of 0.4%. The Canadian dollar took advantage of the solid releases, as the currency trades at its highest levels since January.

There was positive economic news out of the US on Thursday, as Unemployment Claims dipped to 312 thousand last week, beating the estimate of 316 thousand. As well, the Philly Fed Manufacturing Index, which has been on the upswing for most of 2014, continued the trend and improved to 17.8 points, crushing the estimate of 14.3. This was the index’s strongest reading since last August, and points to a manufacturing sector which is expanding in order to keep up with increasing demand.

On Wednesday, the Federal Reserve continued to taper to its QE program, reducing the scheme by $10 billion, to $35 billion/month. If all goes as planned, the Fed could wind up QE in the fall. The Fed also hinted that interest rates will continue to stay low for the foreseeable future, which likely means that we won’t see any rate hikes before the first quarter of 2015. With regard to economic activity, the Fed noted that the recovery is continuing, but it reduced its forecast of economic growth to 2.1-2.3%, down from an earlier forecast of around 2.9 percent. The bottom line? There were no dramatic items in the Fed statement, with one analyst describing current Fed policy as “steady as she goes”. The perception that US interest rates will remain at ultra-low levels has weighed on the US dollar, and has helped the Canadian dollar post gains.


USD/CAD for Tuesday, June 24, 2014

USD/CAD June 24 at 13:50 GMT

USD/CAD 1.0734 H: 1.0737 L: 1.0716


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0572 1.0678 1.0706 1.0775 1.0852 1.0906


Further levels in both directions:


OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in Tuesday trade. This is consistent with the pair’s movement, as USD/CAD is little changed. The ratio has a majority of long positions, indicative of trader bias towards the US dollar breaking out and moving higher.


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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