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USD/CAD – Canadian Dollar Improves as GDP Matches Forecast

USD/CAD has posted slight gains on Tuesday. In the North American session, the pair is trading at 1.3390. Taking a look at today’s releases, Canada’s GDP rose 0.2%, matching the forecast. In the US, ISM Manufacturing rose slightly to 51.9 points, edging above the forecast of 51.8 points. On Wednesday, the Federal Reserve concludes its monthly policy meeting and will set the benchmark interest rate.

The Canadian dollar has been in down-mode lately, failing to post a single winning (daily) session in almost two weeks. That could change on Tuesday, as the currency has improved after Canadian GDP matched expectations. The 0.2% gain in August was considerably softer than the 0.5% gain in July, but the markets appear relieved that the economy continues to expand. The Bank of Canada held interest rates at 0.50% in October, but remains cautious and downgraded its economic forecast. Canada will release Employment Change on Friday, and the markets are braced for a decline of 10.0 thousand. If the market forecast is accurate, the Canadian dollar could resume its downward spiral.

In the US, there was positive news from the consumer front on Monday, as Personal Spending rebounded with a 0.5% gain in September, after a flat reading of 0.0% in August. Gold responded to the reading with slight losses. This release comes on the heels of a disappointing consumer spending report on Friday, as UoM Consumer Sentiment fell to 87.2 points in October, below expectations and dropping to its lowest level since August 2015.  The Fed will also hold a policy meeting on Wednesday, but the markets aren’t expecting a rate move so close to the US presidential election. The rate statement will be carefully monitored, as analysts comb for hints about the extent of support among FOMC members ahead of the crucial December meeting.

USD/CAD Fundamentals

Tuesday (November 1)

*All release times are EDT

*Key events are in bold

USD/CAD for Tuesday, November 1, 2016

USD/CAD November 1 at 9:55 GMT

Open: 1.3419 High: 1.3426 Low: 1.3351 Close: 1.3390

 

USD/CAD Technical

S1 S2 S1 R1 R2 R3
1.3120 1.3253 1.3371 1.3457 1.3551 1.3648

Further levels in both directions:

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Tuesday session. Currently, short positions command a strong majority (67%), indicative of trader bias towards USD/CAD continuing to move to lower ground.

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]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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