Canadian dollar rebounds, retail sales next

The Canadian dollar has reversed directions on Thursday and posted gains. In the North American session, USD/CAD is trading at 1.2076, down 0.46% on the day.

 

On the fundamental front, the Canada ADP employment report for April posted a sharp gain of  351.3 thousand, after a sizzling read of 634.8 thousand in March. The week wraps up with Canada retail sales in March on Friday (12:30 GMT). The consensus is for a respectable gain of 2.3%, after an impressive read of 4.8% in the previous release.

 

FOMC says open to taper

The FOMC minutes from the April policy meeting were somewhat surprising. The minutes stated that Fed policymakers were open to begin considering a taper of bond purchases over the upcoming meetings. This development spooked Wall Street and pushed the dollar higher, on fears that the Fed could begin to tighten policy as early as next month. The admission that the Fed is open to tapering was in marked contrast to the constant message that Fed members have been sending out at practically every public appearance, with a reiteration that the Fed had no plans to taper its massive QE programme for the foreseeable future.

 

The Fed has dismissed the uproar in the markets over a surge in inflation in April, insisting that a jump in inflation was transitory. Now it appears that Fed member Robert Kaplan, who made headlines recently when he urged the Fed to consider discussing tapering, is not a lone voice in the wilderness. At the same time, it should be remembered that the Fed officials are not saying that it plans to taper, rather that they are open to debate the subject.

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       USD/CAD Technical

  • USD/CAD faces resistance at 1.2190 and 1.2275
  • The pair is testing support at 1.2034. Below, there is support at 1.1963

 

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

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

Market Analyst at OANDA
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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