The Canadian dollar is showing little movement at the start of the trading week. Currently, USD/CAD is trading at 1.2872, up 0.04% on the day. On the release front, Canada releases Foreign Securities Purchases. There are no major events in the US. On Tuesday, the US will release Building Permits.
It could be a volatile week for the currency markets, as the Trump tax plan continues to wind its way through the corridors of Congress. On Friday, the House and the Senate reconciled their tax bills. The uniform bill now goes to both branches, where it is expected pass by a slim margin, as all Democrats plan to vote against the bill. Crucially, two Republican senators who were opposed to the bill have now lent their support to the bill. The legislation is the first major overhaul of the US tax code in 30 years, and would represent a major victory for President Trump, who has campaigned vigorously for the legislation and wants to sign it into law before Christmas.
The Canadian currency gained ground on Wednesday following comments from Bank of Canada Governor Stephen Poloz. who spoke at an event in Toronto. Poloz presented an upbeat assessment of the Canadian economy, and indicated that there is more room for rate hikes next year. With the Fed raising rates last week, and almost certain to do so again at the January meeting, the BoC will be under pressure to increase rates early in 2018, or else the Canadian dollar could take a tumble. A major headache for the Bank is NAFTA, as the US has threatened to pull out of the free-trade agreement if Canada and Mexico do not agree to major concessions. If the US does bolt, the Canadian dollar would likely drop, as Canada sends 75% of its export to its southern neighbor.
Monday (December 18)
- 8:30 Canadian Foreign Securities Purchases
- 10:00 US NAHB Housing Market Index. Estimate 70
Tuesday (December 19)
- 8:30 US Building Permits. Estimate 1.28M
- 8:30 US Current Account. Estimate -117B
- 8:30 US Housing Starts. Estimate 1.25M
- Tentative – US FOMC Member Neel Kashkari Speaks
*All release times are GMT
*Key events are in bold
USD/CAD for Monday, December 18, 2017
USD/CAD, December 18 at 8:00 EDT
Open: 1.2868 High: 1.2881 Low: 1.2843 Close: 1.2872
USD/CAD ticked lower in the Asian session but has recovered in European trade
- 1.2850 was tested earlier in support. It is a weak line
- 1.3015 is the next resistance line. It has held firm since early July
- Current range: 1.2860 to 1.3015
Further levels in both directions:
- Below: 1.2860, 1.2757, 1.2630 and 1.2494
- Above: 1.3015, 1.3161 and 1.3260
OANDA’s Open Positions Ratio
USD/CAD ratio is showing little movement in the Monday session. Currently, long and short positions are evenly split, indicative of a lack of trader bias as to what direction USD/CAD will take next.