The Canadian dollar has edged higher in the Wednesday session. Currently, USD/CAD is trading at 1.3221, down 0.20% on the day. On the release front, there are no Canadian events for a third straight day. In the U.S, CPI improved to 0.3%, its strongest gain since January. This matched the estimate. Core CPI improved to 0.2%, also matching the forecast. On Thursday, Canada releases ADP nonfarm employment change. The U.S. will publish retail sales, the Philly Fed Manufacturing Index and unemployment claims.
With the U.S economy firing on all cylinders, the markets are expecting the Federal Reserve to continue raising rates. This sentiment was reinforced by Janet Yellen, former Fed chair. Yellen said on Tuesday that she expected the Fed to raise rates three or four times in 2019. This means that we can expect rate hikes once a quarter in 2019, barring a sharp downturn in the economy. The policy of gradual increases is good news for the U.S dollar, as higher interest rates means that the greenback is more attractive to investors. The Bank of Canada has taken a page out of the Federal Reserve’s book, saying that its policy of gradual rate hikes will continue into 2019. The BoC will have to continue raising rates if the Canadian dollar is to hold its own against the strong U.S. dollar.
Wednesday (November 14)
- 8:30 US CPI. Estimate 0.3%. Actual 0.3%
- 8:30 US Core CPI. Estimate 0.2%. Actual 0.2%
- 10:00 US FOMC Member Quarles Speaks
- 18:00 US Fed Chair Powell Speaks
Thursday (November 15)
- 8:30 Canadian ADP Nonfarm Employment
- 8:30 US Core Retail Sales. Estimate 0.5%
- 8:30 US Retail Sales. Estimate 0.6%
- 8:30 US Philly Fed Manufacturing Index. Estimate 20.7
- 8:30 US Unemployment Claims. Estimate 216K
- 11:30 US Fed Chair Powell Speaks
*All release times are DST
*Key events are in bold
USD/CAD for Wednesday, November 14, 2018
USD/CAD, November 14 at 8:10 EST
Open: 1.3238 High: 1.3249 Low: 1.3219 Close: 1.3221
USD/CAD posted slight losses in the Asian session but then recovered. The pair is showing limited movement in European trade.
- 1.3198 is providing support
- 1.3292 is the next resistance line
- Current range: 1.3198 to 1.3292
Further levels in both directions:
- Below: 1.3198, 1.3099, 1.2970 and 1.2831
- Above: 1.3292, 1.3383 and 1.3461
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