USD/CAD: Canadian Dollar Dips As Greenback Recovers

The Canadian dollar has posted losses in the Thursday session, erasing the losses seen on Wednesday. In North American trade, is trading at 1.3066, up 0.54% on the day. In economic news, U.S. employment claims edged lower to 210,000, beating the estimate of 215,000. The sole Canadian indicator, , posted a gain of 1.0%. On Friday, Federal Reserve Chair Jerome Powell speaks at the gathering of central bankers. As well, the U.S. releases durable goods reports.

The Federal Reserve released the minutes of its July meeting, at which policy-makers maintained the benchmark rate. The minutes noted that the U.S. economy remains strong and hinted that the Fed would raise rates in September. However, policy-makers added that there plan to continue with gradual rate increases could have to be halted if the global trade war worsened, as the trade war represented a major downside risk to the U.S. economy. Fed Chair Jerome Powell will address the Jackson Hole Symposium on Friday, and investors will be listening carefully. Powell is expected to refer to trade tensions, as well as the fact that inflation and wage growth have lagged, despite a booming U.S. economy. The minutes have cemented a rate hike in September, with market odds currently at 96%. The likelihood of a December rate hike stands at 57%.

Canadian retail sales declined 0.2% in June, missing the estimate of -0.1%. The soft reading did not spook investors, who chose to view the release as a pause in strong consumer growth – in May, consumer spending jumped 2.0%. The economy is performing well and inflation is higher, so the pieces appear in place for a quarter-point rate hike by the Bank of Canada in September. With the U.S. expected to raise rates at least once more this year, there is pressure on the Bank of Canada to raise rates or watch the Canadian dollar lose ground to its U.S. counterpart.

USD/CAD Fundamentals

Thursday (August 23)

  • 8:30 Canadian Corporate Profits. Actual 1.0%
  • 8:30 US Unemployment Claims. Estimate 215K. Actual 210K
  • 9:00 US HPI. Estimate 0.3%
  • 9:45 US Flash Manufacturing PMI. Estimate 55.1
  • 9:45 US Flash Services PMI. Estimate 55.9
  • 10:30 US Storage. Estimate 47B
  • Day 1 – Jackson Hole Symposium

Friday (August 24)

  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate -0.7%
  • 10:00 Federal Reserve Chair Powell Speaks
  • Day 2 – Jackson Hole Symposium

*All release times are DST

*Key events are in bold

USD/CAD for Thursday, August 23, 2018

USD/CAD for Aug. 22-24, 2018.

USD/CAD for Aug. 22-24, 2018.

USD/CAD, August 23 at 8:40 DST

Open: 1.2997 High: 1.3080 Low: 1.2992 Close: 1.3066

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12831 1.2970 1.3067 1.3160 1.3292

USD/CAD posted gains in the Asian session and showed limited movement in European trade. The pair has recorded small gains in North American trade

  • 1.2970 is providing support
  • 1.3067 is under pressure in resistance
  • Current range: 1.2970 to 1.3067

Further levels in both directions:

  • Below: 1.2970, 1.2831 and 1.2733
  • Above: 1.3067, 1.3160, 1.3292 and 1.3436

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.

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