USD/CAD – Canadian dollar gains ground, ADP nonfarm payrolls slide

The Canadian dollar is slightly higher in Wednesday trade. In the North American session, the pair is trading at 1.3314, down 0.18% on the day. On the release front, there are no Canadian events. In the U.S., this week’s employment data kicked off with ADP nonfarm payrolls. The release was dismal, falling to 129 thousand, down from 183 thousand in the previous release. Later in the day, ISM Non-Manufacturing PMI is expected to drop to 58.1 points. On Thursday, the U.S. releases unemployment claims and Canada posts Ivey PMI.

What can we expect from the Bank of Canada? Governor Stephen Poloz spoke earlier in the week, saying that global trade tensions are weighing on the Canadian economy. Poloz acknowledged that the slowdown has been worse than the BoC anticipated, but insisted that the economy will bounce back in the near future. At the same time, Poloz said that the bank intended to keep interest rates below the neutral range. This dovish stance has made the Canadian dollar less attractive to investors, and the currency could face further headwinds if economic data fails to improve.

The U.S. economy remains strong, but this week’s key numbers have been anything but impressive. The weak durable goods orders data comes on the heels of soft retail sales numbers for March. Retail sales declined by 0.2%, shy of the estimate of +0.3%. Core retail sales declined by 0.4%, a sharp drop from the 0.9% gain a month earlier. Both indicators posted a second decline in three months, which is bound to raise concerns about the strength of the economy. There are concerns that the economy could be slowing down – growth for the first quarter could be as low as 0.8% annualized, compared to 2.2% in the fourth quarter.

European open – Markets off to a bright start

Pound sterling in the shop window

USD/CAD Fundamentals

Wednesday (April 3)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 184K. Actual 129K
  • 9:45 US Final Services PMI. Estimate 54.8
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 58.1
  • 10:30 US Crude Oil Inventories. Estimate -0.7M

Thursday (April 4)

  • 8:30 US Unemployment Claims. Estimate 215K
  • 10:00 Canadian Ivey PMI. Estimate 51.4

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, April 3, 2019

USD/CAD, April 3 at 8:20 EST

Open: 1.3337 High: 1.3353 Low: 1.3296 Close: 1.3314

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 losses in the Asian and European sessions

  • 1.3290 is providing weak support
  • 1.3383 is the next resistance line
  • Current range: 1.3290 to 1.3383

Further levels in both directions:

  • Below: 1.3290, 1.3200 and 1.3125
  • Above: 1.3383, 1.3445, 1.3552 and 1.3662

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.