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USD/CAD – Canadian dollar stems slide, U.S durable goods next

The Canadian dollar is steady in the Friday session, after recording sharp losses on Thursday. In North American trade, USD/CAD is trading at 1.3066, down 0.11% on the day. On the release front, investors are braced for mixed results from durable goods reports for July. Core durable goods are forecast to rise to 0.5%, while durable goods are expected to downturn, with an estimate of -0.7%. Investors will be listening closely as Federal Reserve Chair Jerome Powell speaks at the economic symposium at Jackson Hole. There are no Canadian events on the schedule.

The Canadian currency has shown significant volatility this week and dropped 0.62% on Thursday. The decline was in response to another wave of tariffs between the U.S and China, which took effect on Thursday. The tariffs, valued at $16 billion, kicked in despite the fact that the parties were holding low-level trade talks at the same time. As expected, the talks did not yield any breakthrough. The escalation in trade sanctions is bad news for the export-reliant Canadian economy and is also weighing on investor risk appetite for minor currencies like the Canadian dollar. If the U.S slaps further tariffs on its trading partners, the Canadian dollar will be sailing into significant headwinds.

The Federal Reserve released the minutes of its July meeting, at which policymakers maintained the benchmark rate. The minutes noted that the U.S economy remains strong and hinted that the Fed would raise rates in September. However, policymakers added that the plan to continue with gradual rate increases could have to be halted if the global trade war worsens, as the trade war represents a major downside risk to the U.S economy. Fed Chair Jerome Powell will address the Jackson Hole Symposium on Friday, and investors will be listening carefully. Powell is expected to refer to trade tensions, as well as the fact that inflation and wage growth have lagged, despite a booming U.S economy. The minutes have cemented a rate hike in September, with market odds currently at 98%. The likelihood of a December rate hike stands at 57%.

Aussie rallies as new prime minister picked [1]

Hammond angers Brexiteers with no deal warning [2]

USD/CAD Fundamentals

Friday (August 24)

*All release times are DST

*Key events are in bold

USD/CAD for Friday, August 24, 2018

USD/CAD, August 24 at 6:55 DST

Open: 1.3081 High: 1.3104 Low: 1.3066 Close: 1.3066

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12831 1.2970 1.3067 1.3160 1.3292

In the Asian session, USD/CAD inched higher but retracted. The pair has posted small losses in North American trade

Further levels in both directions:

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 [6]

Market Analyst at OANDA [7]
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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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