USD/CAD – Canadian dollar dips as U.S consumer inflation beats estimate

The Canadian dollar has edged lower in Wednesday’s North American session. Currently, USD/CAD is trading at 1.3350, up 0.15% on the day. On the release front, there are no Canadian events on the schedule. In the U.S., CPI was stronger than expected, with gain of 0.4%, above the estimate of 0.3%. Core CPI remained steady at 0.1%, shy of the estimate of 0.2%. Later in the day, the FOMC releases the minutes of the March policy meeting. On Thursday, the U.S. releases PPI.

Investors will be keeping a close eye on the Federal Reserve, which releases the minutes of the March policy meeting. At the meeting, the Fed announced that it would taper the reduction of its balance sheet to $15 billion in May, and wind up the taper in September. Currently, the Fed is reducing its balance sheet by $30 a month. The taper marks a loosening of policy, and comes in response to weaker economic data out of the U.S. in recent months. The Fed has become more dovish in 2019, saying that no rate hikes are planned prior to 2020. If the minutes are also dovish, risk appetite could weaken and send the Canadian dollar lower.

Oil prices continue to point upwards and have pushed above $64 for the first time since early November. Civil unrest in Libya could mean that the upward trend will continue. Canada is a major oil producer, so the rise in oil prices has been good news for the Canadian currency, which is trading at its highest level since March 21. OPEC members hold a key meeting in Vienna on Thursday, and any movement in oil prices could affect the direction of USD/CAD.

Global growth downgrade hits sentiment

USD/CAD Fundamentals

Wednesday (April 10)

• 8:30 US CPI. Estimate 0.3%. Actual 0.4%
  
• 8:30 US Core CPI. Estimate 0.2%. Actual 0.1%
  
• 10:30 US Crude Oil Inventories. Estimate 2.6M
• 11:50 US FOMC Member Quarles Speaks
• 13:01 US 10-year Bond Auction
• 14:00 US FOMC Meeting Minutes
• 14:00 US Federal Budget Balance. Estimate -194.7B

Thursday (April 11)

• All Day – OPEC Meetings
• 8:30 U.S. PPI. Estimate 0.3%
• 8:30 US Core PPI. Estimate 0.2%
• 8:30 US Unemployment Claims

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, April 10, 2019

USD/CAD, April 10 at 9:25 EST

Open: 1.3330 High: 1.3360 Low: 1.3319 Close: 1.3350

USD/CAD Technical

USD/CAD showed little movement in the Asian and European sessions. The pair has moved slightly upwards in the North American session

• 1.3290 is a weak support 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 and 1.3125
• Above: 1.3383, 1.3445, 1.3552 and 1.3662

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