USD/CAD – Canadian dollar unchanged ahead of US consumer spending data

The Canadian dollar is unchanged in the Friday session. Currently, USD/CAD is trading at 1.2997, down 0.01% on the day. In the U.S, the focus is on consumer spending data. Core retail sales and retail sales are both expected to tick lower, with readings of 0.5% and 0.4%, respectively. We’ll also get a look at UoM Consumer Sentiment, which is forecast to climb to 96.7 points.

Investors continue to keep a worried eye on the NAFTA negotiations, nervous over the economic repercussions to the Canadian economy if a trade agreement is not hammered out with the United States. However, a PwC report earlier this week points to a far more troubling event – President Trump’s massive corporate tax cuts. The PwC report estimates that the tax reforms could cost Canada 635,000 jobs (3.4% of the labor market) and reduce Canada’s GDP by up to $85 billion (4.9% of the economy). The damage to the Canadian economy would be felt most keenly in the business sector, as lower corporate taxes in the U.S will reduce the incentive for U.S companies to set up operations north of the border.

In the U.S, the red-hot labor market continues to be the envy of industrialized countries around the globe. The unemployment rate is at a remarkable 3.8% and unemployment claims were almost unchanged at 204 thousand, another excellent reading. Despite the strong employment front and a booming economy, inflation remains well short of the Federal Reserve’s target of 2 percent. In August, CPI and Core CPI came in at 0.1% and 0.2%, respectively, falling short of their estimates.

CBRT takes the focus off BoE and ECB meetings

Prospect of Sino-US talks lifts markets

USD/CAD Fundamentals

Friday (September 14)

  • 8:30 US Core Retail Sales. Estimate 0.5%
  • 8:30 US Retail Sales. Estimate 0.4%
  • 8:30 US Import Prices. Estimate -0.2%
  • 9:15 US Capacity Utilization Rate. Estimate 78.3%
  • 9:15 US Industrial Production. Estimate 0.3%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 96.7
  • 10:00 US Business Inventories. Estimate 0.5%
  • 10:00 Preliminary UoM Inflation Expectations

*All release times are DST

*Key events are in bold

USD/CAD for Friday, September 14, 2018

USD/CAD, September 14 at 6:30 DST

Open: 1.2999 High: 1.3001 Low: 1.2983 Close: 1.2997

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2666 1.2831 1.2970 1.3067 1.3160 1.3292

USD/CAD showed limited movement in the Asian session and this trend has continued in European trade

  • 1.2970 is providing support
  • 1.3067 is the next resistance line
  • Current range: 1.2970 to 1.3067

Further levels in both directions:

  • Below: 1.2970, 1.2831 and 1.2666
  • Above: 1.3067, 1.3160, 1.3292 and 1.3386

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.