USD/CAD – Canadian dollar dips to 8-week low, BoC decision next

The Canadian dollar continues to lose ground this week. In the Wednesday session, the pair is trading at 1.3380, up 0.21% on the day. USD/CAD is poised to break above the 1.34 line, for the first time since early January. On the release front, U.S., ADP nonfarm payrolls dipped to a 3-month low. The indicator fell to 183 thousand, down from 213 thousand in the previous release. In Canada, the trade deficit ballooned to C$4.6 billion in January. Later in the day, Canada releases Ivey PMI and the Bank of Canada is expected to hold the benchmark rate at 1.75%. On Thursday, the U.S. releases unemployment claims and Canada publishes building permits.

After raising rates three times in 2018, the Bank of Canada has eased up on rate hikes in 2019. With the BoC expected to remain on the sidelines at the Wednesday 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.

In the U.S., the markets are keeping an eye on employment numbers. We’ll get a look at unemployment claims on Thursday, followed by nonfarm payrolls and wage growth, which will be released on Friday. Analysts are expecting mixed numbers on Friday. Wage growth is expected to improve to 0.3%, but nonfarm payrolls are projected to slide to 185 thousand, after a strong gain of 304 thousand in the previous release. The unemployment rate has been at record lows, and is expected to dip to a sizzling 3.9% in the February report.

Euro trades softer as ECB looms

USD/CAD Fundamentals

Wednesday (March 6)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 190K. Actual 183K
  • 8:30 Canadian Trade Balance. Estimate -2.4B. Actual -4.6B
  • 8:30 Canadian Labor Productivity. Estimate -0.2%. Actual -0.4%
  • 8:30 US Trade Balance. Estimate -57.8B. Actual -59.8B
  • 10:00 BoC Rate Statement
  • 10:00 BoC Overnight Rate. Estimate 1.75%
  • 10:00 Canadian Ivey PMI. Estimate 55.1
  • 10:30 US Crude Oil Inventories. Estimate 1.2M
  • 12:00 US FOMC Member Williams Speaks
  • 14:00 US Beige Book

Thursday (March 7)

  • 8:30 US Unemployment Claims. Estimate 225K
  • 8:30 Canadian Building Permits. Estimate -4.8%

*All release times are EST

*Key events are in bold

USD/CAD for Wednesday, March 6, 2019

USD/CAD, March 6 at 7:30 EST

Open: 1.3352 High: 1.3381 Low: 1.3350 Close: 1.3380

USD/CAD Technical

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

USD/CAD posted slight gains in the Asian session and is showing limited movement in European trade

  • 1.3290 is providing support
  • 1.3383 is under pressure in resistance as USD/CAD continues to move higher
  • 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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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