USD/CAD adrift on light economic calendar

The Canadian dollar is in calm waters in the Thursday session. In North American trade, USD/CAD is trading at 1.3244, down 0.09% on the day.

On the fundamental front, Canada Housing Starts fell to 209 thousand, down from 262 thousand beforehand. Over in the US, unemployment claims edged up to 84o thousand, up from 837 thousand. This was well above the forecast of 820 thousand. Canada releases employment data on Friday, which could shake up the sleepy Canadian dollar.

Federal Reserve notes concern over fiscal aid

The Federal Reserve released the minutes of its September policy meeting on Wednesday. There were no dramatic comments for the markets to digest, and the response of the currency markets was muted. The Fed wants to see more government fiscal aid for the economy, but has to walk a fine line and avoid making any statements that could be construed as political (although Donald Trump has repeatedly attacked the Fed). The minutes expressed concern that the lack of a federal fiscal stimulus package could hamper the US recovery, which members said was moving faster than expected. A stimulus bill has been stuck in Congress for months, and earlier this week President Trump said he breaking off talks with the Democrats with regard to the bill.

The markets might have shown more of a reaction to the minutes if members had clarified the guidelines for raising interest rates, but members balked, saying that there was no need for forward guidance on raising rates, given the low-rate environment that is expected to continue for a period of time.

USD/CAD Technical

  • USD/CAD broke below support at 1.3228 in the North American session. Below, there is support at the round number of 1.3200
  • 1.3313 is the next resistance line. The next resistance line is at 1.3370
  • the 10-day line remains relevant, as it was tested by the pair on Wednesday

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.