The Canadian dollar has ticked higher in the Friday session. Currently, USD/CAD is trading at 1.3470. It continues to be quiet on the release front, with no Canadian events this week. In the US, the sole event is Chicago PMI, with the markets expecting the indicator to dip to 56.5 points.
The Canadian dollar is sensitive to movement in oil prices. With crude levels showing gains, the currency has received a boost and is trading at 1-week highs against the US dollar. The markets are expecting oil prices to remain strong, as the recent agreement between OPEC and other oil exporters, which calls for production cuts, is expected to begin on January 1. Under the agreement, production is expected to fall 1.8 million barrels per day. Saudi Arabia, OPEC’s largest producer, has agreed to bear most of the cuts in production. However, even if oil exporters abide by their commitments under the deal, it’s questionable if crude prices will continue to rise substantially, as US shale producers are likely to step in if oil prices move above the $60 level.
The US consumer is feeling good about the economy and expecting good things in 2017, according to recent consumer confidence surveys. The CB Consumer Confidence report surged in December to 113.7, its highest level since August 2001. This reading comes on the heels of UoM Consumer Sentiment, which climbed to a 12-year high, with a reading of 93.8 points. Both of these well-respected surveys found that consumers are confident that continuing economic growth will create new jobs and raise incomes. Trump’s economic platform remains short on details, but he has promised to cut taxes while increasing public spending. If Trump manages to implement both of these goals, the US economy could heat up and also help global growth pick up speed.
Friday (December 30)
- 9:45 US Chicago PMI. Estimate 56.5
*All release times are EST
*Key events are in bold
USD/CAD for Friday, December 30, 2016
USD/CAD December 30 at 7:55 EST
Open: 1.3479 High: 1.3497 Low: 1.3457 Close: 1.3463
- USD/CAD has shown little movement in the Asian and European sessions
- 1.3457 is under pressure in support. It could break in the Friday session
- 1.3589 has strengthened in resistance
Further levels in both directions:
- Below: 1.3457, 1.3371, 1.3253 and 1.3120
- Above: 1.3589, 1.3759 and 1.3889
- Current range: 1.3457 to 1.3589
OANDA’s Open Positions Ratio
USD/CAD ratio is showing short positions with a strong majority (63%). This is indicative of trader bias towards USD/CAD continuing to move lower.
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