Canadian Dollar Steady Ahead Of Canadian, US Job Numbers

The Canadian dollar is showing limited movement on Friday. Currently, USD/CAD is trading at 1.3240. It’s a busy day on the release front, with a host of employment indicators on the schedule. The US releases Nonfarm Payrolls, Average Hourly Earnings and the unemployment rate. Canada will publish Employment Change and the unemployment rate, as well as Trade Balance.

The US dollar retreated ahead of the Federal Reserve minutes on Wednesday and the Canadian currency took full advantage, gaining close to one percent. USD/CAD has dropped to a low of 1.3254 on Thursday, its lowest level since December 14. The Canadian dollar slumped in the last two weeks of 2016, but has rebounded. With Canada and the US releasing key employment numbers on Friday, we could see some volatility from USD/CAD.

The US dollar retreated in the Thursday session, following the release of the Federal minutes from the December meeting. The Canadian dollar has gained 1.4% since Wednesday. USD/CAD dipped below the 1.33 line on Thursday, marking a 3-week low. The minutes were cautious in tone, with Fed policymakers essentially saying that monetary policy in the coming months will be dictated in large part by the economic platform of the incoming Trump administration. FOMC members are concerned about higher inflation levels, given the “prospects for more expansionary fiscal policies in the coming years”. This is a clear reference to president-elect Trump’s plans to increase fiscal spending and cut taxes, which would likely result in higher inflation, something the US hasn’t had to deal with for years. Still, policymakers appear unchanged in their view that gradual rate hikes remains an appropriate monetary policy. The Fed members acknowledged that there is “considerable uncertainty” regarding future fiscal and economic programs. Many analysts are predicting another rate hike in June, but this could of course change, depending on the performance of the US economy in the first half of 2017.

USD/CAD Fundamentals

Friday (January 6)

  • 8:30 Canadian Employment Change. Estimate -5.1K
  • 8:30 Canadian Trade Balance. Estimate -1.6B
  • 8:30 Canadian Unemployment Rate. Estimate 6.9%
  • 8:30 US Average Hourly Earnings. Estimate 0.3%
  • 8:30 US Nonfarm Employment Change. Estimate 175K
  • 8:30 US Unemployment Change. Estimate 4.7%
  • 10:00 Canadian Ivey PMI. Estimate 56.0

*All release times are GMT

*Key events are in bold

USD/CAD for Friday, January 6, 2017

USD/CAD

USD/CAD January 6 at 6:40 EST

Open: 1.3230 High: 1.3268 Low: 1.3226 Close: 1.3247

USD/CAD Technicals

S1S2S1R1R2R31.29221.30031.31201.32531.33711.3457
  • USD/CAD posted slight gains in the Asian session. The pair has been flat in the European session
  • 1.3120 is providing support
  • 1.3253 was tested in resistance earlier and is under pressure

Further levels in both directions:

  • Below: 1.3120, 1.3003 and 1.2922
  • Above: 1.3253, 1.3371, 1.3457 and 1.3589
  • Current range: 1.3120 to 1.3253

OANDA’s Open Positions Ratio

In the Friday session, USD/CAD ratio is showing long positions with a majority (57%). This is indicative of trader bias towards USD/CAD continuing to move higher.

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