USD/CAD has posted gains in the Thursday session. Currently, the pair is trading at 1.3309, up 0.40% on the day. On the release front, Canadian ADP nonfarm payrolls fell by 13.0 thousand in December, after a strong gain of 39.1 thousand a month earlier. In the U.S., unemployment claims dropped to 213 thousand, below the forecast of 219 thousand. This marked a 5-week low. There was more good news from the U.S. economy, as Philly Fed Manufacturing Index jumped to 17.0, crushing the estimate of 9.7 points. On Friday, the U.S. releases UoM Consumer Sentiment.
The U.S. government shutdown has meant that the flow of economic data has been reduced. This has magnified the importance of the Beige Book, which was released on Wednesday. The report found that businesses across the country had become less optimistic, due to higher interest rates, swings in the financial markets and global trade tensions. At the same time, most of the regional Feds said that growth in their region was “modest to moderate”. The report reiterates the recent dovish stance we are seeing from the Federal Reserve, which has sent strong signals to the markets that rate hikes could be on hold for the near future.
Last week, the Bank of Canada lowered its growth forecast for 2019 to 1.7%, down from 2.1%. The bank also noted concerns over lower oil prices and the global trade war, both of which have hurt the economy. Still, the BoC expects economic activity to strengthen in the second half of the year, so it appears unlikely that the BoC will raise rates in the first quarter. An important factor in rate policy is the level of inflation, and investors are braced for a soft reading from CPI for December. CPI is expected to post a second successive decline of 0.4%. If inflation remains weak, the BoC will have an easier time holding off from rate cuts.
Thursday (January 17)
- 8:30 Canadian ADP Nonfarm Payrolls. Actual -13.0K
- 8:30 US Philly Fed Manufacturing Index. Estimate 9.7. Actual 17.0
- 8:30 US Unemployment Claims. Estimate 219K. Actual 213K
- 10:30 US Natural Gas Storage. Estimate -73B
- 10:45 US FOMC Member Quarles Speaks
Friday (January 18)
- 8:30 Canadian CPI. Estimate -0.4%
- 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.0
*All release times are EST
*Key events are in bold
USD/CAD for Thursday, January 17, 2019
USD/CAD, January 17 at 9:15 EST
Open: 1.3256 High: 1.3310 Low: 1.3250 Close: 1.3309
USD/CAD posted small gains in the Asian session and continues to move higher in European trade. The pair is steady in the North American session
- 1.3290 has switched to a support role as USD/CAD has moved higher. It remains a weak line
- 1.3383 is the next resistance line
- Current range: 1.3290 to 1.3383
Further levels in both directions:
- Below: 1.3290, 1.3200, 1.3125 and 1.3049
- Above: 1.3383, 1.3461 and 1.3552
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