USD/CAD: Canadian Dollar Steady Despite New U.S. Tariffs On China

The Canadian dollar has posted small gains in the Tuesday session. Currently, is trading at 1.3003, down 0.12% on the day. On the release front, Canada released . There are no major releases in the U.S. On Wednesday, the U.S. publishes and .

A welcome respite in the U.S.-China trade spat was shattered on Monday. President Donald Trump imposed tariffs of 10% on some $200 billion worth of Chinese goods and threatened further action if China retaliated. Unlike earlier round of tariffs, the Canadian dollar has managed to hold its own, and investors have not flocked to the U.S. dollar. The reason? Investors were braced for a move by Trump, and may be sighing in relief that the tariff was set at 10% rather than at 25%. One senior economist summed up Trump’s most recent salvo as “bad but manageable.” However, if the Chinese retaliate and the U.S. takes further measures, this would likely shake up the currency markets and boost the U.S. dollar.

Canadian and U.S. negotiators continue to insist that the sides will hammer out a new NAFTA agreement, but investors have their doubts. There have been no three-way talks since August, and last week, a senior Mexican negotiator said that Mexico would like to conclude a three-way agreement but was prepared to advance bilaterally with the United States. Ottawa cannot afford to be left out of NAFTA, and has made concessions to open up its dairy sector to U.S. producers. However, Trump could squeeze further concessions out of Canada before agreeing to a deal. If the deadlock continues, the uncertainty could weigh on the Canadian dollar.

USD/CAD Fundamentals

Tuesday (September 18)

  • 8:30 Canadian Manufacturing Sales. Estimate 1.0%
  • 10:00 US NAHB Housing Market Index. Estimate 66
  • 16:00 US TIC Long-Term Purchases. Estimate 65.1B

Wednesday (September 19)

  • 8:30 US Building Permits. Estimate 1.31M
  • 8:30 US Housing Starts. Estimate 1.24M

*All release times are DST

*Key events are in bold

USD/CAD for Tuesday, September 18, 2018

USD/CAD for Sept. 17-19, 2018.

USD/CAD for Sept. 17-19, 2018.

USD/CAD, September 18 at 6:35 DST

Open: 1.3041 High: 1.3065 Low: 1.3001 Close: 1.3002

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2666 1.2831 1.2970 1.3067 1.3160 1.3292

USD/CAD posted gains in the Asian session but then retracted. The pair is slightly lower in European trade

  • 1.2970 is providing support
  • 1.3067 is the next resistance line
  • Current range: 1.2970 to 1.3067

Further levels in both directions:

  • Below: 1.2970, 1.2831 and 1.2666
  • Above: 1.3067, 1.3160, 1.3292 and 1.3386

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 !!