The Canadian dollar is unchanged in the Tuesday session. In the North American session, USD/CAD is trading at 1.2815, down 0.02% on the day. On the release front, there are no Canadian events and one minor U.S indicator. On Wednesday, the U.S releases two key events – ADP nonfarm payrolls and ISM Non-Manufacturing PMI.
After months of grueling talks, Canadian and U.S negotiators finally hammered out a trade agreement on Monday, which paves the way for a new trade agreement between Canada, Mexico and the United States. The NAFTA agreement, which was a pillar of the Canadian economy for 24 years, will give way to the USMCA – the U.S-Mexico-Canada Agreement. Under the new pact, Canada’s auto sector will be shielded from U.S tariffs, and in return, U.S farmers will have more access to Canada’s highly protected dairy industry. News of the historic agreement has boosted the Canadian dollar, and the currency continues to impress, having gained 2.4% since mid-September against the greenback.
In the U.S, consumer spending and confidence levels remain strong. Consumer spending rose 0.3% in August, matching the forecast. The UoM Consumer Sentiment report pushed above the 100-level for the first time since March, although the reading of 100.1 missed the estimate of 100.5 points. On the inflation front, the Core PCE Price Index, which is the Federal Reserve’s preferred inflation indicator, dipped to 0.0% in August, shy of the estimate of 0.1%. This was the first time the indicator failed to post a gain since March 2017. Still, inflation remains close to the Fed’s target of 2%, so a December rate hike remains likely.
Tuesday (October 2)
- All Day – US Total Vehicles
- 12:45 US Fed Chair Powell Speaks
Wednesday (October 3)
- 8:15 ADP Nonfarm Employment Change. Estimate 187K
- 10:00 US ISM Nonfarm Manufacturing PMI. Estimate 58.1
- 16:00 US Fed Chair Powell Speaks
*All release times are DST
*Key events are in bold
USD/CAD for Tuesday, October 2, 2018
USD/CAD, October 2 at 8:35 DST
Open: 1.2816 High: 1.2841 Low: 1.2800 Close: 1.2813
USD/CAD ticked lower in the Asian session. In European trade, the pair edged higher but has given up these gains
- 1.2970 is a support level
- 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 1.2733
- Above: 1.3067, 1.3160, 1.3292 and 1.3436
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