The Canadian dollar is unchanged on Monday, after USD/CAD rallied late last week. In the North American session, the pair is trading at 1.3430, unchanged on the day. There are no economic indicators on the schedule. In the U.S., we’ll hear from two FOMC members. On Tuesday, the U.S. publishes building permits and CB consumer confidence.
The Canadian dollar ended the week on a sour note, as soft consumer spending data weighed on the currency. Retail sales fell 0.3% in January, marking a third straight decline. Core retail sales gained a negligible 0.1%, shy of the estimate of 0.2%. There was better news on the inflation front, as CPI posted a sharp gain of 0.7% in January, edging above the forecast of 0.6%. The negative effect of weak oil prices has eased, which could bode well for inflation numbers in the first quarter. Still, the outlook for the Canadian economy is cloudy, with the ongoing global trade war weighing on Canada’s export-reliant economy.
Is a recession in the cards for the U.S. economy? At last week’s policy meeting, the Federal Reserve indicated it had no plans to raise interest rates in 2019 and also lowered its growth forecast for 2019 to 2.1%, down from 2.3% in December. There was more bad news on Friday, as the spread between 3-month and 10-year Treasury notes turned negative for the first time since 2007. This is known as an inverted yield curve, which is considered a recession indicator. All eyes will be on U.S. Final GDP, which will be released on Thursday. If GDP is weaker than expected, investors could lose their risk apetite and the Canadian dollar could lose ground.
Monday (March 25)
- 2:00 US FOMC Member Evans Speaks
- 20:30 US FOMC Member Rosengren Speaks
Tuesday (March 26)
- 8:30 US Building Permits. Estimate 1.32M
- 10:00 US CB Consumer Confidence. Estimate 132.1
*All release times are DST
*Key events are in bold
USD/CAD for Monday, March 25, 2019
USD/CAD, March 25 at 8:50 EST
Open: 1.3429 High: 1.3440 Low: 1.3404 Close: 1.3432
USD/CAD showed little movement in the Asian session. In European trade, the pair edged lower but recovered.
- 1.3383 is providing support
- 1.3445 is a weak resistance line
- Current range: 1.3383 to 1.3445
Further levels in both directions:
- Below: 1.3383, 1.3290, 1.3200 and 1.3125
- Above: 1.3445, 1.3552 and 1.3662
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