The Canadian dollar is steady on Tuesday, as the pair trades in the high-1.17 range in the North American session. On the release front, the Canadian Raw Materials Price Index looked awful, posting a decline of 5.3%. The Industrial Product Price Index came in at -0.4%. In the US, the ISM Non-Manufacturing PMI dropped to 56.2 points, short of expectations.
It was a poor start to the week for Canadian releases, as the Raw Materials Price Index continued to post declines. The index slipped 5.8% in November, its fifth straight decline. The estimate stood at -4.6%. Softer demand for raw materials is due to weak consumer demand as well as the global slowdown, which has put a dent in the export sector. We’ll get a look at Trade Balance on Wednesday, with the markets braced for a deficit for November.
In the US, the ISM Non-Manufacturing PMI, a key indicator, dropped sharply to 56.2 points in December, its lowest reading in six months. The index was well off the forecast of 58.2 points. On the manufacturing front, there was more bad news as Factory Orders posted a drop of 0.7%, marking a fourth straight decline. This was short of the forecast of -0.3%.
On Friday, US ISM Manufacturing PMI disappointed, falling to 55.5 points. This missed the forecast of 57.6 points and marked a 6-month low for the index. Still, market sentiment remains positive regarding the US economy and the US dollar continues to look sharp against its major rivals. We’ll get a look at the ISM Non-manufacturing PMI on Tuesday. The markets are expecting a softer reading in the December release.
USD/CAD for Tuesday, January 6, 2015
USD/CAD January 6 at 15:00 GMT
USD/CAD 1.1775 H: 1.1792 L: 1.1731
- USD/CAD has shown limited movement on Tuesday. The pair dropped to a low of 1.1731 in the Asian session, putting pressure on support at 1.1723.
- 1.1723 remains an immediate support line. 1.1669 is next.
- 1.1875 is providing strong resistance. It has held firm since May 2009.
- Current range: 1.1723 to 1.1875
Further levels in both directions:
- Below: 1.1723, 1.1669, 1.1580, 1.1493 and 1.1414
- Above: 1.1875, 1.1975, 1.2096 and 1.2190
OANDA’s Open Positions Ratio
USD/CAD ratio is pointing to gains in long positions on Tuesday. This is consistent with the pair’s movement, as the US dollar has posted small gains. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar moving to higher ground.
- 13:30 Canadian RMPI. Estimate -4.6%. Actual -5.8%.
- 13:30 Canadian IPPI. Estimate -0.5%. Actual -0.4%.
- 14:45 US Final Services. Estimate 53.8 points. Actual 53.3 points.
- 15:00 US ISM Non-Manufacturing PMI. Estimate 58.2 points. Actual 56.2 points.
- 15:00 US Factory Orders. Estimate -0.3%. Actual -0.7%.
*Key releases are highlighted in bold
*All release times are GMT
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