The Canadian dollar continues to have an uneventful week. In the Tuesday session, the pair is trading at 1.2587, up 0.07% on the day. On the release front, there are no Canadian indicators on the schedule. In the US, the sole indicator is the NFIB Small Business Index, which improved to 106.9, above the estimate of 106.2 points. On Wednesday the US releases CPI and retail sales indicators. Traders should be prepared for movement from USD/CAD during the North American session.
Last week’s market selloff boosted the US dollar, at the expense of the Canadian dollar and most other major currencies. The Canadian dollar dropped 1.2% last week, and is down 2.2% in February, erasing the gains we saw in January. Interestingly, the catalyst for the current turbulence has been solid economic data in the US, namely, improved payrolls and wage growth reports. Is the correction over? It’s too early too tell, since much of the sell-off is related to investor concerns over possible interest rate hikes by major central banks. The Bank of England has said it could accelerate its pace of hikes, and the Federal Reserve could follow suit if inflation moves higher.
It’s been a rough February for the Canadian dollar, which has declined 2.4%. The loonie was hurt by last week’s massive sell-off in the stock markets, as nervous investors lost their risk appetite and scurried away from minor currencies such as the Canadian dollar. However, the country’s economic fundamentals remain solid, and the Bank of Canada is expected to raise rates twice more this year, after hiking rates in January. If oil prices remain high and the economy remains strong, there is room for the Canadian dollar to gain ground.
Canadian employment growth has impressed in recent months, but the trend reversed sharply in January. Employment Change plunged by 88.0 thousand, well off the estimate of +10.3 thousand. The unemployment rate climbed from 5.7% to 5.9%, missing the estimate of 5.8%. The Canadian dollar reacted on Friday with losses, but managed to recover and ended the Friday session almost unchanged.
Tuesday (February 13)
- 6:00 US NFIB Small Business Index. Estimate 106.2. Actual 106.9
- 8:00 US FOMC Member Loretta Mester Speaks
Wednesday (February 14)
- 8:30 US CPI. Estimate 0.3%
- 8:30 US Core CPI. Estimate 0.2%
- 8:30 US Core Retail Sales. Estimate 0.2%
- 8:30 US Retail Sales. Estimate 0.5%
*All release times are GMT
*Key events are in bold
USD/CAD for Tuesday, February 13, 2018
USD/CAD, February 13 at 8:05 EST
Open: 1.2577 High: 1.2594 Low: 1.2566 Close: 1.2587
USD/CAD was flat in the Asian session and has posted limited movement in the European session
- 1.2494 is providing support
- 1.2630 is providing resistance
- Current range: 1.2494 to 1.2630
Further levels in both directions:
- Below: 1.2494, 1.2351, 1.2190 and 1.2060
- Above: 1.2630, 1.2757 and 1.2855
OANDA’s Open Positions Ratio
USD/CAD ratio is almost unchanged in the Tuesday session. Currently, long and short positions are evenly split, indicative of a lack of trader bias towards as to what direction USD/CAD takes 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.