USD/CAD – Greenback pushes Canadian dollar above 1.33

The Canadian dollar remains under pressure in the Tuesday session. Currently, the pair is trading at 1.3337, up 0.25% on the day. On the release front, there are no Canadian events. The highlight in the U.S. is ISM Non-Manufacturing PMI, which is expected to rise to 57.4 points. On Wednesday, the U.S. releases ADP nonfarm payrolls. All eyes will be on the Bank of Canada, which is expected to hold the benchmark rate at 1.75%. Canada will also release trade balance and Ivey PMI.

With the Bank of Canada expected to stay on the sidelines at its policy meeting, the spotlight will be on the BoC rate statement. Policymakers have said it expected the economic slowdown in Canada to be temporary, but a sluggish Q4 has raised concerns about the health of the economy. The BoC hiked rates three times last year, and this may have hurt consumer spending, which was weak in the fourth quarter. With economic growth headed in the wrong direction and inflation levels below the BoC target of 2.0%, policymakers are unlikely to raise interest rates in the near term.

After a disappointing week, the Canadian dollar continues to lose ground. On Monday, USD/CAD touched a high of 1.3352, its highest level since late January. The Canadian dollar slipped almost 1 percent on Friday, after GDP declined in December for a second straight month. The economy was stagnant in Q4, with a negligible gain of 0.1%. For all of 2018, the economy expanded 1.8%, shy of the BoC target of 2.0%. The BoC hiked rates three times last year, and this may have hurt consumer spending, which was weak in the fourth quarter. With economic growth headed in the wrong direction and inflation levels below the BoC target of 2.0%, policymakers are unlikely to raise interest rates in the near term.

mixed-session-asia-clouds-european-open

Trade talk hopes suggest positive start for Europe

U.S Dollar in Demand

USD/CAD Fundamentals

Tuesday (March 5)

  • 7:30 US FOMC Member Rosengren Speaks
  • 9:45 US Final Services PMI. Estimate 56.2
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 57.4
  • 10:00 US New Home Sales. Estimate 597K
  • Tentative US IBD/TIPP Economic Optimism. Estimate 51.2
  • 14:00 US Federal Budget Balance. Estimate 17.3B

Wednesday (March 6)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 190K
  • 8:30 Canadian Trade Balance. Estimate -1.7B
  • 10:00 BoC Rate Statement
  • 10:00 BoC Overnight Rate. Estimate 1.75%
  • 10:00 Canadian Ivey PMI. Estimate 55.1

*All release times are EST

*Key events are in bold

USD/CAD for Tuesday, March 5, 2019

USD/CAD, March 5 at 10:00 EST

Open: 1.3303 High: 1.3353 Low: 1.3303 Close: 1.3337

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3125 1.3200 1.3290 1.3383 1.3445 1.3552

USD/CAD posted small gains in the Asian and European sessions. The pair is showing little movement in North American trade

  • 1.3290 is a weak support level
  • 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, 1.3445 and 1.3552

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

Market Analyst at OANDA
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.