USD/CAD – Canadian Dollar Unchanged, US Jobs Report Next

The Canadian dollar is almost unchanged to start the week. In Monday’s North American session, USD/CAD is trading at 1.2832, up 0.03% on the day. On the release front, there are no Canadian releases on the schedule. In the US, JOLTS Job Openings is expected to to drop to 6.03 million. On Tuesday, the US releases PPI, an important inflation indicator.

The markets continue to digest Friday’s US employment numbers, which were a mix. Nonfarm Employment Change softened in November, but the reading of 228 thousand easily beat the estimate of 198 thousand. However, Average Hourly Earnings, which measures wage growth, came in at 0.2%, shy of the estimate of 0.3%. Analysts remain stumped as to why wages remain stubbornly low, given a red-hot labor market which is running at full capacity. On an annual basis, wages rose 2.5%, short of the forecast of 2.7%. The Fed is also concerned with the lack of wage growth, and this could have a significant effect on monetary policy – if wage growth and inflation shows improvement in 2018, the Fed could raise rates up to three times in 2018.

Canadian housing indicators continue to impress. On Friday, Housing Starts in November jumped to 252 thousand, well above the estimate of 214 thousand. This marked the strongest reading since March. On Thursday, Building Permits posted a strong gain of 3.5%, crushing the forecast of 1.7%. Meanwhile, the Bank of Canada did not pull any surprises and maintained the benchmark rate at an even 1.00%. The BoC is casting a worried look at NAFTA, as a protectionist-minded US administration has threatened to torpedo the free-trade agreement unless Canada and Mexico make major concessions. An additional headache for the BoC is that the Federal Reserve is expected to raise rates in December and January. The BoC will have to follow suit with a raise of its own, or watch the Canadian dollar head lower against the greenback.

USD/CAD Fundamentals 

Monday (December 11)

  • 10:00 US JOLTS Job Openings. Estimate 6.03M
  • 13:01 US 10-y Bond Auction

Tuesday (December 12)

  • 8:30 US PPI. Estimate 0.4%
  • 8:30 US Core PPI. Estimate 0.2%

*All release times are GMT

*Key events are in bold

USD/CAD for Monday, December 11, 2017

USD/CAD, December 11 at 8:35 EDT

Open: 1.2853 High: 1.2865 Low: 1.2831 Close: 1.2859

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2494 1.2630 1.2757 1.2860 1.3015 1.3161

USD/CAD has edged higher in the Asian and European sessions

  • 1.2757 is providing support
  • 1.2860 is under pressure in resistance
  • Current range: 1.2757 to 1.2860

Further levels in both directions:

  • Below: 1.2757, 1.2630, 1,2494, and 1.2368
  • Above: 1.2860, 1.3015 and 1.3161

OANDA’s Open Positions Ratio

USD/CAD ratio is showing little movement in the Monday session. Currently, long positions have a majority (52%), indicative of slight trader bias towards USD/CAD breaking out and moving higher.

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.