USD/CAD Canadian Dollar Flat on Thin Holiday Trading

The Canadian dollar is trading close to the 1.3445 price level on a low volume session due to the US memorial Day and UK Bank Holidays. The pair has been moving in a tight trading range ahead of the next four days were a deluge of US data is expected.
The highlight of the week is the release of the U.S. non farm payrolls (NFP) on Friday. The U.S. Federal Reserve is heavily anticipated to hike rates when the Federal Open Market Committee (FOMC) meets in June 13/14. The CME FedWatch tool is showing a probability of 84.2 percent of the benchmark fed funds rate going up to 100 to 125 basis points range.

On the Canadian front the biggest release will be the monthly gross domestic product on Wednesday, May 31 at 8:30 am EDT. The release of the Trade balance on Friday is likely to be overshadowed by the US jobs report in a week where the loonie is on the back foot to US releases. The Canadian stock market was higher after positive earnings reports from banks last week.

Political risk has put the USD under pressure as Russian connections have raised the possibility of the Trump administration collaborating with foreign representatives during the election. The Fed has kept the USD at current levels with the majority of the recent Fed speakers saying that rate hikes are needed sooner rather than later. The words from San Francisco Fed President John Williams that the US economy does not need a fiscal stimulus package was seen as a USD positive as there are a lot of obstacles to tax reform in the US, and some of them put in place by the Trump administration.

usdcad Canadian dollar graph, May 29, 2017

The USD/CAD lost 0.011 percent in the last 24 hours. The currency pair is trading at 1.3445 in a low liquidity trading session. Investors are already looking ahead at the data to be released tomorrow. The US consumer confidence data to be released at 10:00 am EDT and the Reserve Bank of New Zealand (RBNZ) fiscal stability report later in the day at 5:00 pm EDT.

Due to the Memorial Day holiday the ADP private payrolls report and the weekly US crude inventories will be pushed back to Thursday at 8:15 am EDT for the employment report and 11:00 am EDT for the crude stock info.

Market events to watch this week:

Tuesday, May 30
10:00 am USD CB Consumer Confidence
5:00 pm NZD RBNZ Financial Stability Report
Wednesday, May 31
8:30 am CAD GDP m/m
9:30 pm AUD Private Capital Expenditure q/q
9:30 pm AUD Retail Sales m/m
Thursday, Jun 1
4:30 am GBP Manufacturing PMI
8:15 am USD ADP Non-Farm Employment Change
8:30 am USD Unemployment Claims
10:00 am USD ISM Manufacturing PMI
11:00 am USD Crude Oil Inventories

Friday, Jun 2
4:30 am GBP Construction PMI
8:30 am CAD Trade Balance
8:30 am USD Average Hourly Earnings m/m
8:30 am USD Non-Farm Employment Change
8:30 am USD Unemployment Rate

*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar

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.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza