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USD/CAD – Canadian dollar quiet as U.S markets closed for Thanksgiving

The Canadian dollar has ticked lower in the Thursday session. In the North American session, USD/CAD is trading at 1.3228, down 0.03% on the day. On the release front, Canadian Corporate Profits posted a strong gain of 3.9%, marking a 4-month high. In the U.S, banks and stock markets are closed for Thanksgiving and there no indicators on the schedule. On Friday, Canada releases CPI and retail sales reports.

U..S stock markets fell sharply on Tuesday, dragged down by technological stocks. The Dow Jones and S&P 500 indices both gave up their year-to-date gains. The drop sent the Canadian dollar reeling, as investors avoided risk assets and USD/CAD jumped over 1 percent, pushing above the 1.33 level for the first time since late June. However, stock markets have recovered, as has the Canadian dollar, which posted gains on Wednesday. The sharp drop in the equity markets points to nervousness on the part of investors, as the nagging U.S-China trade dispute has taken a bite out of both economies, and investors are concerned that the conflict will dampen the current economic expansion in the United States  and further corrections in global equity markets could mean more headwinds for the wobbly Canadian dollar.

This week’s turmoil in the stock markets has raised questions about the Federal Reserve’s monetary policy. The markets had expected the Fed to raise rates up to four times in 2019, but with more signs that the U.S. economy could slow in 2019, policymakers may ease up on the pace of rate hikes. The Federal Reserve remains on track to gradually raise rates in 2019, but the pace could be slower than anticipated just a few weeks ago. There’s no denying that the U.S economy is currently in great shape, with unemployment at historically low levels and the $1.5 trillion tax cut package boosting economic growth. However, the rosy picture could change next year. The U.S-China trade war is expected to take a bite out of U.S growth, and the stimulus from the tax cut will fade over time. Economic growth has been slowing, with third-quarter growth expected at 2.7%, down from 3.5% in the second quarter. A rate increase in December remains a strong possibility, with the odds of a rate hike standing at 76%.

European update – Markets slip on US holiday [1]

OANDA Trading market musings [2]

USD/CAD Fundamentals

Thursday (November 22)

Friday (November 23)

*All release times are DST

*Key events are in bold

USD/CAD for Thursday, November 22, 2018

USD/CAD, November 22 at 9:10 EST

Open: 1.3332 High: 1.3245 Low: 1.3214 Close: 1.3228

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2970 1.3099 1.3198 1.3292 1.3383 1.3461

USD/CAD was flat in the Asian session and has edged lower in European trade

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 [6]

Market Analyst at OANDA [7]
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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