The Canadian dollar has edged higher in the Monday session. Currently, USD/CAD is trading at 1.3209, down 0.22% on the day. There are no releases out of Canada or the U.S. on the schedule. On Tuesday, the U.S. releases CB Consumer Confidence, which is forecast to dip to 136.2 points.
There was good news on Friday, as Canadian consumer spending and inflation data improved. However, the Canadian dollar failed to take advantage and lost ground. CPI posted a gain of 0.3%, after two straight declines. This beat the estimate of 0.1%. Retail sales bounced back with a gain of 0.2%, after a decline of -0.1%. This was above the forecast of 0.1%. Inflation is close to the Bank of Canada’s inflation target of 2% – on an annualized basis, CPI rose 2.4% in October and 2.2% in September.
The markets have grown accustomed to strong economic numbers from the U.S, but quarterly GDP reports point to a slowdown, and there has even been talk of a recession. This has led to speculation that the Federal Reserve could ease up on its interest rate hikes next year. Only a few weeks ago, there were expectations that the Fed could raise rates each quarter in 2019, but the mood has become more cautious. The U.S.-China trade war has caused a slowdown both economies, and President Trump’s $1.5 trillion tax cut has boosted the economy, but its effect on the economy is fading. A rollback in U.S rate hikes would make the greenback less attractive to investors, which would be good news for the Canadian dollar.
Monday (November 26)
*There are no Canadian or U.S. events
Tuesday (November 27)
- 10:00 US CB Consumer Confidence. Estimate 136.2
*All release times are DST
*Key events are in bold
USD/CAD for Monday, November 26, 2018
USD/CAD, November 26 at 8:20 EST
Open: 1.3237 High: 1.3237 Low: 1.3187 Close: 1.3209
USD/CAD edged lower in the Asian session. In European trade, the pair posted slight losses but has recovered
- 1.3198 was tested earlier in support. It is a weak line
- 1.3292 is the next line in resistance
- 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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