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USD/CAD – Lack of data leaves Canadian dollar lower

The Canadian dollar has recorded slight losses in the Monday session, paring some of the gains seen on Friday. Currently, USD/CAD is trading at 1.3047, up 0.17% on the day. There are no Canadian or U.S events on the schedule. On Tuesday, the U.S releases CB Consumer Confidence.

The new trading week has started with reports that the NAFTA negotiations are showing progress. The Mexican peso has responded with strong gains on Monday, but the Canadian dollar has been steady. A senior Mexican official said that the issues surrounding the auto sector were “basically resolved”, and President Trump said on Saturday that a deal was near.  A new NAFTA agreement would reduce trade tensions between the U.S and the other two NAFTA members, Canada and Mexico. The auto sector is a key pillar of the Canadian economy, and a new NAFTA pact should boost confidence in the Canadian economy and provide a boost to the Canadian dollar.

Proceed with caution. This sums up the dovish message from Jerome Powell, who spoke at the Jackson Hole Economic Symposium on Friday. His remarks sent the dollar broadly lower and the Canadian dollar jumped on the bandwagon and ended the week with gains. Powell reiterated that the Fed would continue its policy of gradual interest rate hikes, saying that a cautious approach was prudent. The Fed has faced criticism about its current policy from all sides – some analysts have argued that the Fed has been too aggressive, given weak inflation, while others say the Fed should tighten more quickly, due to the extremely tight labor market. Powell appeared to take a middle approach of raising rates, but slowly. The Fed has already raised rates twice this year, and a September hike is practically a given, with the CME Group estimating the odds of a hike at 96%. The odds of a December hike currently stand at 66%.

Powell, Puppets and Politics [1]


USD/CAD Fundamentals

Monday (August 27)

Tuesday (August 28)

*All release times are DST

*Key events are in bold

USD/CAD for Monday, August 27, 2018

USD/CAD, August 27 at 8:15 DST

Open: 1.3025 High: 1.3067 Low: 1.3001 Close: 1.3047

USD/CAD Technical

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

USD/CAD ticked lower in the Asian session. The pair has reversed directions in European trade and moved higher

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 [5]

Market Analyst at OANDA [6]
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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