The Canadian dollar is slightly higher on Friday. Currently, USD/CAD is trading at 1.2513, down 0.25% on the day. On the fundamental front, Canada will release tier-2 data, including Housing Starts. In the US, today’s highlight is UoM Consumer Sentiment, which is expected to accelerate to 88.9 points.
Canada ADP employment report sparkles
Canada’s ADP job report has been bleak in recent months, with triple-digit declines in the past two months. However, the indicator roared back in March, with an impressive gain of 634.8 thousand new jobs. ADP attributed the strong rebound in the labour market, which was based in all sectors, to relaxed health restrictions in some provinces.
However, the picture could be significantly worse in the April data, as Ontario, the most populous province, imposed a 4-week lockdown at the end of March. Canada’s Covid rate per capita is now outpacing the US, and this is likely to take a toll on the economy.
The news was far less positive in the manufacturing sector. Manufacturing Sales suffered a decline of 1.6%, worse than the forecast of -1.1%, and its weakest showing in six months.
In the US, retail sales surged in March, as consumers loosened their purse strings. Headline retail sales sparkled at 9.8%, while Core Retail Sales rose 8.4%. Both releases easily beat their estimates of 5.8% and 5.1%, respectively. The catalyst for the surge in consumer spending was the latest batch of government stimulus, with US households receiving stimulus cheques of 1400 dollars, as well as many states relaxing health restrictions. US consumers were only too happy to hit the stores and purchase big-ticket items, including cars, electronics and furniture.
Somewhat surprisingly, the explosive retail sales release failed to push the US dollar higher, as the currency markets appeared more focused on other matters, such as the vaccine rollout in Germany and France.
- There is weak support at 1.2478. Below, there is support at 1.2423
- There is a pivot point at 1.2556
- On the upside, we have resistance at 1.2611 and 1.2689
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/
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