USD/CAD – Canadian dollar steady after solid employment numbers close out week

The Canadian dollar has ticked lower in Monday trading. Currently, USD/CAD is trading at 1.3075, down 0.11% on the day. On the release front, it’s a quiet start to the trading week. The sole U.S event is Consumer Credit, which is expected to jump to $12.2 billion. On Tuesday, Canada releases Housing Starts and Building Permits, and the U.S will publish JOLTS Jobs Openings.

Canada’s economy created 31.8 thousand jobs in June, well above the estimate of 22.3 thousand. This follows two straight declines. Wage growth also looked strong, as hourly earnings gained 3.5% in June on an annualized basis. At the same time, the unemployment rate climbed to 6.0%, above the estimate of 5.8%. Last week, Bank of Canada Governor Stephen Poloz said that the July rate decision on Wednesday would be based on economic data, and Friday’s strong job creation data will be added ammunition in favor of raising rates at the upcoming meeting.

U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.

USD/CAD showed little response to the FOMC minutes, which were released on Thursday. The minutes were somewhat dovish in tone, as policymakers gave a thumbs-up to the strong U.S economy, but expressed concern about developments abroad. These include growing trade tensions with U.S trading partners, as well as political and economic developments in Europe. The minutes also reiterated the Fed’s support for a “gradual” raise in interest rates. The markets are circling the September policy meeting for the next rate hike, with the CME Group setting the odds of a quarter-point hike at 80%.

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USD/CAD Fundamentals

Monday (July 9)

  • 15:00 US Consumer Credit. Estimate 12.2B

Tuesday (July 10)

  • 8:15 Canadian Housing Starts. Estimate 195K
  • 8:30 Canadian Building Permits
  • 10:00 US JOLTS Job Openings. Estimate 6.88M

*All release times are DST

*Key events are in bold

USD/CAD for Monday, July 9, 2018

USD/CAD, July 9 at 8:20 DST

Open: 1.3089 High: 1.3101 Low: 1.3069 Close: 1.3075

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 1.2970 1.3067 1.3160 1.3292 1.3436

USD/CAD edged lower in the Asian session and is showing little movement in European trade

  • 1.3067 is providing weak support
  • 1.3160 was tested earlier in resistance
  • Current range: 1.3067 to 1.3160

Further levels in both directions:

  • Below: 1.3067, 1.2970 and 1.2831
  • Above: 1.3160, 1.3292, 1.3436 and 1.3530

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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