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USD/CAD quiet ahead of Non-Manufacturing PMI

The Canadian dollar is unchanged at the start of the new trading week. In the European session, USD/CAD is trading at 1.3550, up 0.03% on the day.

Canadian Dollar Flexes Muscle

The Canadian dollar enjoyed its best week in a month, as USD/CAD slipped 1.0 percent. Investors remain attracted to the Canadian dollar, despite the severe economic conditions around the globe due to the Corvid-19 pandemic. The conventional wisdom is that minor currencies such as the Canadian dollar are vulnerable in times of crisis, because risk appetite is low. However, to the surprise of many analysts, the safe-haven US dollar has sagged, while the Canadian dollar has had a decent second quarter, gaining 3.5% against the greenback. Investors shrugged off a disastrous Canadian GDP release in June, as the economy shrank by 11.6 percent.

US services sector in focus

Later on Monday, the US releases the ISM Non-Manufacturing Index, which should be treated as a market-mover. The services sector has been hit hard by Corvid-19, as the lockdown forced the shutdown of businesses across the country. The PMI has recorded two successive releases below the 50-level, which points to contraction. Analysts expect the index to improve to 50.0, up from 45.4 beforehand. As well, the US will publish the final estimate for Services PMI. The initial estimate came in at 46.7, and the final reading is expected to be upwardly revised to 47.0 points. The index is expected to remain in contraction territory, but has rebounded nicely since a dismal reading of 26.7 in April.

A bright start for Asia [1]

 

USD/CAD Fundamentals

Monday (July 6)

Tuesday (July 7)

*All release times are EDT

*Key events are in bold

 

USD/CAD Technical

USD/CAD is showing little movement on Monday, ahead of the North American session.  The pair posted small losses in the European session but recovered in North American trade.

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 [5]

Market Analyst at OANDA [6]
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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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