The Canadian dollar has ticked higher in the Friday session. Currently, USD/CAD is trading at 1.2828, up 0.15% on the day. In economic news, the spotlight is on employment indicators on both sides of the border, so we could see some movement from the pair in the North American session. US releases Average Hourly Earnings, Nonfarm Payrolls and the unemployment rate. The markets are expecting NFP to rebound to 311 thousand, but Average Hourly Earnings is forecast to slow to 0.2 percent. No change is expected in the unemployment rate, with an estimate of a sizzling 4.2 percent. As well, the US releases ISM Non-Manufacturing PMI, which is expected to drop to 58.5 points. Canada releases Employment Change, with a forecast of 15.3 thousand. The unemployment rate is forecast to hold at 6.2%, and we’ll also get a look at Trade Balance.
October was a rough month for the Canadian dollar, as the currency slipped 3.4 percent. Bank of Canada Governor Stephen Poloz didn’t help matters, as he spoke in sober terms about the economy in his testimony before a parliamentary committee. Poloz said that the economy is at a “crucial” spot in the economic cycle, noting concern over soft inflation and wage growth, and high household debt. Poloz said that the BoC will be cautious before raising interest rates. The markets are not expecting any moves before 2018, with the likelihood of a rate hike in December at just 21 percent. Canadian GDP declined in August, disappointing the markets. The decline of 0.1% was the first drop since October 2016. With the Federal Reserve expected to raise rates at its December meeting, the loonie’s slide could continue if the BoC does not match the Fed and raise rates next month.
On Thursday, US President Trump nominated Federal Reserve Governor Jerome Powell to head the Federal Reserve. Powell will take over in February 2018 when Yellen’s term expires. Powell is expected to hold the course with monetary policy, which has been marked by incremental and small rate hikes since December 2015. It’s all but a given that the Fed will raise interest rates in December, but the forecast for 2018 is less clear. If the US economy continues to grow at current levels, we could see up to three rate hikes next year. Powell will also be tasked with continuing to trim the Fed’s huge balance sheet of $4.2 billion. Last month, the Fed has started trimming the balance sheet by $10 billion/mth, but these cuts are expected to increase in size next year.
Friday (November 3)
- 8:30 Canadian Employment Change. Estimate 15.3K
- 8:30 Canadian Unemployment Rate. Estimate 6.2%
- 8:30 Canadian Average Hourly Earnings. Estimate 0.2%
- 8:30 Canadian Trade Balance. Estimate -3.0B
- 8:30 US Average Hourly Earnings. Estimate 0.2%
- 8:30 US Nonfarm Employment Change. Estimate 311K
- 8:30 US Unemployment Rate. Estimate 4.2%
- 8:30 US Trade Balance. Estimate -43.3B
- 9:45 US Final Services PMI. Estimate 55.7
- 10:00 ISM Non-Manufacturing PMI. Estimate 58.5
- 10:00 US Factory Orders. Estimate 1.3%
- 12:15 US FOMC Member Neel Kashkari Speaks
*All release times are GMT
*Key events are in bold
USD/CAD for Friday, November 3, 2017
USD/CAD Friday, November 3 at 7:40 EDT
Open: 1.2809 High: 1.2836 Low: 1.2801 Close: 1.2829
USD/CAD was flat in the Asian session and has edged higher in European trade
- 1.2778 is providing support
- 1.2943 is the next resistance line
- Current range: 1.2778 to 1.2943
Further levels in both directions:
- Below: 1.2778, 1.2701, 1.2598
- Above: 1.2943, 1.3032 and 1.3126
OANDA’s Open Positions Ratio
USD/CAD ratio is showing little movement in the Friday session. Currently, long and short positions are evenly split, indicative of a lack of trader bias as to what direction USD/CAD takes next.