The Canadian dollar has ticked higher in the Monday session. Currently, USD/CAD is trading at 1.3193, down 0.07% on the day. Canadian and U.S banks are closed for a holiday, so traders should not expect much movement from the pair on Monday. There are no Canadian events and just one minor event in the United States.
Inflation continues to rise higher in the United States. On Friday, the Producer Price Index (PPI) jumped 0.6%, its sharpest gain since January 2017. This easily beat the estimate of 0.2%. Core PPI was also sharp, with a gain of 0.5%, compared to a gain of 0.2%. Stronger inflation will reinforce expectations that the Fed will hike rates hike in December. Currently, the odds of a quarter-percent rate hike stands at 76%. On the consumer front, UoM consumer sentiment dropped to 98.3, down from 99.0 points. Still, this beat the forecast of 98.0 points.
The Canadian economy continues to perform well, but strong numbers have not been enough to boost a struggling Canadian dollar. This was underscored on Thursday by a superb reading from Ivey PMI, a key gauge of economic activity. The indicator surged to 61.8 in November, up sharply from 50.4 in October. This reading easily beat the estimate of 50.9 points. Earlier this week, Bank of Canada Governor Stephen Poloz said that the Bank would continue gradually raising rates from the current 1.75% to a “neutral stance” of between 2.5% and 3.5%. The magic question for investors is how quickly the BoC will move in this direction. The BoC has raised rates some five times in the past 15 months, and upcoming rate hikes will help make the Canadian dollar an attractive option for investors.
Monday (November 9)
- Tentative – US Loan Officer Survey
- 14:30 US FOMC Member Mary Daly Speaks
*All release times are EST
*Key events are in bold
USD/CAD for Monday, November 12, 2018
USD/CAD, November 12 at 8:55 EST
Open: 1.3205 High: 1.3214 Low: 1.3183 Close: 1.3193
USD/CAD ticked higher in the Asian session and the trend has continued in European trade
- 1.3099 is providing support
- 1.3198 has switched to a resistance role following gains by USD/CAD on Friday. It remains a weak line
- Current range: 1.3099 to 1.3198
Further levels in both directions:
- Below: 1.3099, 1.2970, 1.2831 and 1.2733
- Above: 1.3198, 1.3292 and 1.3383
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.