USD/CAD is unchanged in the Monday session, as the pair trades at the 1.33 line. On the release front, Canadian Wholesale Sales posted a gain of 0.2%, shy of the forecast of 0.3%. There are no US events on the schedule.
Canadian CPI disappointed on Friday, as the index declined 0.2%, short of the forecast of 0.0%. This marked a second straight decline, as Canadian annual inflation came in at 1.5%, short of the BoC target of 2 percent. Core Retail Sales fell to 0.1% in October, matching the forecast. The reading was much weaker than the previous month, which boasted a strong gain of 1.4%. Despite the soft consumer data, the Canadian dollar managed to hold its own against the greenback, closing the Friday session with small gains. Earlier in the week, the Canadian dollar sagged as BoC Governor Stephen Poloz expressed his unease about the new US administration, saying he expected Canada to take a “material” hit from a much more protectionist United States after Donald Trump becomes president. Poloz added that the bank was closely monitoring its southern neighbor and biggest economic partner, and that a rate cut was on the table.
Donald Trump was sworn in as the president on Friday, as the Trump era has begun. The inauguration proceeded without incident, but anti-Trump protesters responded with a massive protest on Saturday in Washington, much to the irritation of Trump. Although there is an unwritten rule that a new president is granted 100 days of grace, this may not prove to be the case this time around. The bruising election campaign is still fresh, Trump is in a combative mood and continues to snipe at the media, so chivalry and goodwill may be in short supply. As we enter uncharted territory and begin the Trump era, how will the US dollar react? On Friday, Oanda’s Stephen Innes provided this assessment:
the downside risk for the USD remains elevated more so from Trump’s inauguration if he fails to underscore economic policy. On the other hand, if Donald comes out firing on all fiscal stimulus cylinders, bond yield will surge, and the greenback would catch an enormous updraft… the President–elect takes centre stage as we begin a new chapter in American politics and global financial markets. Buckle up; we are likely in for a wild ride in the coming 100 days [see the link below for the full article]
Monday (January 23)
- 8:30 Canadian Wholesale Sales. Estimate 0.3%
*All release times are GMT
*Key events are in bold
USD/CAD for Monday, January 23, 2017
USD/CAD January 23 at 8:45 EST
Open: 1.3303 High: 1.3315 Low: 1.3266 Close: 1.3299
- USD/CAD posted small losses in the Asian session but recovered in European trade. Early in the North American session, the pair has shown limited movement
- 1.3253 is providing support
- 1.3371 is the next resistance line
Further levels in both directions:
- Below: 1.3253, 1.3120, 1.3003 and 1.2922
- Above: 1.3371, 1.3457 and 1.3599
- Current range: 1.3253 to 1.3371
OANDA’s Open Positions Ratio
USD/CAD ratio is almost unchanged in the Monday session. Currently, long positions (49%) and short positions (51%) are almost an even split, indicative of a lack of trader bias as to what direction USD/CAD will take next.
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.