USD/CAD: Canadian Dollar Dips To 2-Week Low As Risk Appetite Softens

has edged higher in the Tuesday session. Currently, the pair is trading at 1.3328, up 0.24% on the day and at its highest level since Jan. 7. On the release front, Canada publishes , which has posted two declines in the past three months. The estimate for the November release is -0.8%. In the U.S., the sole indicator is , which are expected to drop to 5.27 million. On Wednesday, Canada releases retail sales reports.

There was pessimistic news from the well-respected International Monetary Fund on Monday. The IMF revised downwards its global growth forecast. In October, the IMF projected growth of 3.7% percent, but this has been revised to 3.5 percent. IMF head Christine Lagarde said that the world’s economy continues to expand, but “it is facing significantly higher risks.” Canadian growth was also revised lower, to 1.9% down from 2.0% in October. Earlier in January, the Bank of Canada lowered its growth forecast for the economy, from 2.1% in October down to 1.7%. With the Canadian economy vulnerable to global trade tensions and lower oil prices, the Canadian dollar could hit some headwinds in early 2019.

Investors were greeted with weak data on Monday, as China released GDP numbers. The world’s second largest economy continues to expand, but GDP has been softening, pointing to an economic slowdown. China reported that GDP had slowed to 6.6% in 2018, marking its lowest level since 1990. GDP for the fourth quarter dipped to 6.4%, compared with 6.5% in the previous quarter. The soft GDP release comes on the heels of soft trade and manufacturing data. A decline in China could send the Japanese economy into recession, as the export and manufacturing sectors are heavily dependent on Chinese demand.

The Trump administration has threatened further tariffs if a deal is not reached by March 1, but a second round of negotiations between the sides is scheduled for the end of the month in Washington. Chinese officials will be under pressure to show more flexibility in the talks, in order to stem the economic bleeding.

USD/CAD Fundamentals

Wednesday (January 23)

  • 8:30 Canadian Core Retail Sales
  • 8:30 Canadian Retail Sales

*All release times are EST

*Key events are in bold

USD/CAD for Tuesday, January 22, 2019

USD/CAD for Jan. 21-23, 2019.

USD/CAD for Jan. 21-23, 2019.

USD/CAD, January 22 at 6:55 EST

Open: 1.3296 High: 1.3343 Low: 1.3293 Close: 1.3328

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3125 1.3200 1.3290 1.3383 1.3561 1.3552

USD/CAD has posted small gains in the Asian and European sessions

  • 1.3290 is providing weak support
  • 1.3383 is the next resistance line
  • Current range: 1.3290 to 1.3383

Further levels in both directions:

  • Below: 1.3290, 1.3200, 1.3125 and 1.3049
  • Above: 1.3383, 1.3461 and 1.3552

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.

Source link

Leave a Reply

error: Content is protected !!