USD/CAD is showing slight losses in the Friday session. In the North American session, USD/CAD is trading at 1.2878, down 0.15% on the day. On Friday, Canadian employment change rebounded with 15.4 thousand jobs, but this fell short of the estimate of 21.3 thousand. In the US, nonfarm payrolls jumped to 313 thousand, crushing the estimate of 205 thousand. However, wage growth slipped to 0.1%, down from 0.3%.
Is President Trump baiting his trading partners into an all-out global trade war? After declaring that trade wars are a “good thing”, Trump made good on his tariff threat on Thursday, and signed an order imposing 25% tariffs on steel imports. Canada is the largest exporter of steel to the US, accounting for some 16% of US steel imports. The move could have severely impacted on the Canadian steel industry, but Trump has exempted Canada and Mexico from the tariffs, at least temporarily, drawing a huge sigh of relief from Ottawa. Still fears of an all-out global trade war remain a serious concern for Canada and the resignation of Gary Cohn, a senior economist in the White House who opposed the tariffs, will only dampen investor risk appetite and could weigh on minor currencies like the Canadian dollar.
The Federal Reserve is widely expected to raise rate four times in 2018, but the Bank of Canada will likely be unable to compete with that kind of pace. The BoC is concerned with economic growth, which slowed in the fourth quarter, as well as uncertainty over NAFTA, which could fall apart if the Trump administration makes good on its threat to withdraw if its demands for more favorable treatment for US goods is not met. The Bank is not expected to raise rates before May, and if the Fed outpaces the BoC on the rate front, the Canadian dollar could lose ground to a more attractive US currency.
Friday (March 9)
- 8:30 Canadian Employment Change. Estimate 21.3K. Actual 15.4K
- 8:30 Canadian Unemployment Rate. Estimate 5.9%. Actual 5.8%
- 8:30 US Average Hourly Earnings. Estimate 0.2%. Actual 0.1%
- 8:30 US Nonfarm Employment Change. Estimate 201K. Actual 313K
- 8:30 US Unemployment Rate. Estimate 4.0%. Actual 4.1%
*All release times are GMT
*Key events are in bold
USD/CAD for Friday, March 9, 2018
USD/CAD, March 9 at 9:00 EST
Open: 1.2897 High: 1.2909 Low: 1.2866 Close: 1.2878
USD/CAD showed little movement in the Asian session and has edged lower in European trade
- 1.2865 is under pressure in support
- 1.2920 is the next resistance line
- Current range: 1.2865 to 1.2920
Further levels in both directions:
- Below: 1.2865, 1.2757 and 1.2630
- Above: 1.2920, 1.3014, 1.3165 and 1.3270
OANDA’s Open Positions Ratio
USD/CAD ratio continues to show little movement this week. Currently, short positions have a majority (59%), indicative of trader bias towards USD/CAD reversing directions and moving lower.
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.