- November 2, 2018
- Posted by: Trading
- Category: Currency Forecast
The Canadian dollar has edged lower in the Friday session. Currently, is trading at 1.3098, up 0.07% on the day. On the release front, Canadian slowed to 11,200, short of the estimate of 12,700. However, the ticked lower to 5.8%, just below the estimate of 5.9%. Over in the U.S., rocketed to 250,000, crushing the estimate of 194,000. This marked the second highest gain in 2018. Wage growth eased to 0.2%, matching the forecast, while the remained steady at 3.7%.
Asian equity markets posted strong gains on Friday, buoyed by a report that U.S. President Donald Trump is working on a trade agreement with China, which he will present to Chinese President Xi Jinping at a Group of 20 summit in Argentina later this month. If the two economic giants are able to reach an agreement, the result would be a boon for global trade. The Canadian economy is heavily reliant on its export sector, so a stronger global economy would be good news for the Canadian dollar.
The Canadian economy grew 0.1% in August, marking a seventh straight month of expansion. Higher oil production in Alberta and higher oil prices fuelled the modest gain. The economy has been performing well and remains on track for annualized growth of 2% in 2018. Unemployment is at low levels and is expected to remain pegged at 5.9% for October. The Bank of Canada raised rates last week to 1.75%, and the hawkish message from the bank was a broad hint to the markets that further rate hikes are in store. With the economy operating close to full capacity, rate hikes are an effective method of ensuring that the economy does not overheat. The BoC is also mindful that the Federal Reserve is expected to raise rates again in December, which would mark a fourth rate hike in 2018. Policy-makers do not want to see divergence widen between U.S. and Canadian rates, and another rate hike from the BoC would be bullish for the Canadian dollar.
USD/CAD for Friday, November 2, 2018
USD/CAD for Oct. 31-Nov. 1, 2018.
USD/CAD, November 2 at 8:50 DST
Open: 1.3086 High: 1.3101 Low: 1.3049 Close: 1.3098
USD/CAD showed little movement in the Asian session. This pair has edged lower in European trade
- 1.2970 is providing support
- 1.3099 is under pressure in resistance and could break during the North American session
- Current range: 1.2970 to 1.3099
Further levels in both directions:
- Below: 1.2970, 1.2831 and 1.2733
- Above: 1.3099, 1.3198, 1.3292 and 1.3383
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