USD/CAD – Canadian dollar gains ground, manufacturing PMIs next

USD/CAD has posted slight losses in the Monday session. Currently, the pair is trading at 1.3496, down 0.15% on the day. On the release front, the focus is on manufacturing data. Canada releases manufacturing PMI. In April, the indicator dropped to 49.7, which shows contraction. The U.S. releases ISM manufacturing PMI, which has pointed to expansion in recent months. The April estimate stands at 53.0.

Canada’s economy grew by 0.5% in March, above the estimate of 0.4%. This was an impressive rebound from February, when GDP declined by 0.1%. Despite the positive news, the Canadian dollar was unable to gain ground on Friday, as trade tensions continue to weigh on minor currencies like the Canadian dollar.

The Canadian dollar is sensitive to trade risks, and lost ground on Friday after President Trump threatened to slap tariffs on all Mexican products, due to the illegal immigration crisis. Although Trump said that tariffs would be set at just 5%, risk appetite has fallen, sending the Canadian dollar lower. There was more negative news out of China, as manufacturing PMI dipped into contraction territory, with a reading of 49.4, shy of the estimate of 49.9 points. The Chinese economy has been hit hard by the trade war with the U.S., which has weakened global demand. This, in turn, has hurt export-reliant economies such as Canada, which has weighed on the Canadian dollar.

Escalating Trade Feuds Keep Markets Nervous

Risk aversion continues into the new month

Dollar direction to be dictated by week’s events

USD/CAD Fundamentals

Monday (June 3)

  • 9:10 FOMC Member Quarles Speaks
  • 9:30 Canadian Manufacturing PMI
  • 9:45 US Final Manufacturing PMI. Estimate 50.8
  • 10:00 US ISM Manufacturing PMI. Estimate 53.0
  • 10:00 US Construction Spending. Estimate 0.5%
  • 10:05 ISM Manufacturing Prices. Estimate 51.5
  • All Day – U.S. Wards Total Vehicle Sales. Estimate 16.8M
  • 13:25 US FOMC Member Bullard Speaks

*All release times are DST

*Key events are in bold

USD/CAD for Monday, June 3, 2019

USD/CAD, June 3 at 8:20 DST

Open: 1.3517 High: 1.3527 Low: 1.3488 Close: 1.3496

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3290 1.3383 1.3445 1.3552 1.3662 1.3771

USD/CAD edged lower in the Asian session. In European trade, the pair posted gains but has retracted

  • 1.3445 is providing support
  • 1.3552 is the next resistance line
  • Current range: 1.3445 to 1.3552

Further levels in both directions:

  • Below: 1.3445, 1.3383 and 1.3290
  • Above: 1.3552, 1.3662, 1.3771 and 1.3859

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.